By Denny Jacob
Twitter Inc. shares rose 7.6% to $40 in after-hours trading Wednesday after Elon Musk allowed loan commitments connected to his takeover of the social media platform to expire, and committed to more funding in the deal.
The Tesla Inc. chief executive committed to provide an additional $6.25 billion in equity financing to fund a portion of his planned acquisition of Twitter, according to securities filings. This brings the aggregate principle amount of the equity commitment to $33.5 billion.
Mr. Musk also allowed the remainder of the margin loan commitments in the commitment letter from Morgan Stanley Senior Funding Inc. and other financial institutions, which committed to provide Mr. Musk up to $12.5 billion in margin loans to fund a portion of his acquisition, to expire, according to securities filings.
Mr. Musk may replace portions of the previous financing commitments, according to the filings.
The filings also said he is having discussions with certain existing shareholders, including former Twitter CEO Jack Dorsey, about the possibility of contributing common stock shares to a parent entity at or immediately prior to the close to retain a stake in the parent entity or Twitter after a merger is complete.
Twitter CEO Parag Agrawal told shareholders the company is proceeding with work on the agreed $44 billion takeover by Mr. Musk after the billionaire said the deal was "temporarily on hold," The Wall Street Journal reported Wednesday.
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(END) Dow Jones Newswires