Forgive Me. We Will Have To Talk Europa Discoveries Tomorrow. Tonight? Financing Takeovers.

Or. . . "Funding NOT (Yet) Secured".

It is likely that he is still over ten days away (based on my experience putting together just such packages, for takeovers in the past) from having a financing package together, just to be able to say "financing secured" -- for the $54.20 bid. But that bid is certain to be rejected by the Twitter board of directors, perhaps even before he gets to that point -- yet this week. [A more disciplined team would have worked in silence to get the financing first, then acquired on the street to get to ~9%; and only then made an offer to the Twitter board. He was too early (without financing) AND too late (in disclosing, at SEC). . . and so, he did it all. . . backwards. You know Morgan Stanley did not advise this course.]

In any event, here's some of the NYT commentary on the state of the play, as of an hour ago:

. . .Morgan Stanley, the investment bank working with Mr. Musk on the potential deal, has been calling banks and other potential investors to shore up financing for the offer, four people with knowledge of the situation said. Mr. Musk is first focused on raising debt and has not yet begun to seek equity financing for his bid, one of the people said.

Mr. Musk is evaluating various packages of debt, including. . . preferred debt and a loan against his shares of Tesla, the electric carmaker that he runs, two of the people said. . . .

Mr. Musk is aiming to pull together a fully funded offer as soon as [possible]... though that timeline is far from certain. The people with knowledge of the discussions were not authorized to speak publicly because the details are confidential and in flux.

It is unclear if Mr. Musk’s efforts will be successful. . . .

That is an understatement. He needs to get an offer into the $90s to be sure the board will waive the pill, and go friendly.

But to get to that kind of cash, he will have to put his Tesla shares in a highly levered position -- and this bid could yet jeopardize the rest of his empire thereby.

So it is no wonder that the lenders are moving gingerly here. They don't want a downdraft in Tesla's stock price to put them underwater on a money losing (on a GAAP basis) company like Twitter.

Should be. . . entertaining. Stay tuned.

नमस्ते