To support his bid for Twitter to be bought, Elon Musk registered three Delaware companies under the name of “X Holdings”.
According to a Wednesday filing to the Securities and Exchange Commission, X Holdings I would be the parent company for a possible transaction. X Holdings II would merge and purchase the common stock of Twitter. Separate SEC filings add that X Holdings III will be used to fund the transaction.
Musk is considering whether to make a tender offer for all shares of Twitter’s common stock. He cites the board’s inability to respond to his $54.20 per-share offer.
Musk claims he has received $46.5 billion in commitments to finance a possible deal. This includes approximately $21 billion in equity financing, and approximately $25.5 billion in debt financing through Morgan Stanley Senior Funding. Other firms include Bank of America, Mizuho Bank and Barclays.
Twitter informed that it was “committed to conducting a careful and comprehensive review to determine what course of action it believes is best for the company and all Twitter stockholders.”
Musk holds a 9.2% share in Twitter. He has been harshly critical of the platform and Parag Agrawal its chief executive. Recently, he was asked if the company adheres to free speech principles.
Musk was initially invited by Twitter to join its board. However, he declined. Musk wouldn’t have been allowed to own more that 14.9% of Twitter stock during his time on the board. Twitter created a short-term shareholder rights plan to stop Musk or any other entity from acquiring beneficial ownership in excess of 15% of Twitter’s common stock. This plan was commonly known as a “poison pill” and was approved by the board. The plan expires April 14, 2023.
It is not clear if X Holdings could be used to combine Musk’s other companies, SpaceX and Tesla, Neuralink, and The Boring Company.
Musk expressed an interest in forming a holding company to own shares in SpaceX and Tesla in 2012. Dave Lee, a Tesla investor, suggested that X be formed. Musk agreed with this idea. Musk also owns the domain X.com. This online payment company was merged with PayPal.
Musk told TED’s Chris Anderson recently that combining all of the company’s assets into one would be “tricky.”