"Apollo Considering Participation in Twitter Acquisition Battle... Partnering with Musk?"

by Jeong Hyunjin

Published 19 Apr.2022 07:01(KST)

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Elon Musk, CEO of Tesla, is reportedly considering the participation of Apollo Global Management, a US private equity firm and one of the world's largest mergers and acquisitions (M&A) specialists, in his bid to acquire Twitter, according to the Wall Street Journal (WSJ) and others on the 18th (local time).

WSJ cited sources saying that Apollo has discussed supporting the acquisition of Twitter and is considering providing shares or funding to Musk or other potential bidders such as US private equity firm Thoma Bravo, which is also reviewing entering the acquisition race. Thoma Bravo is known to have recently contacted Twitter to discuss acting as a "white knight" (a friendly corporate acquirer favored by the target company's management).

CNBC reported, citing sources, that Apollo is not interested in directly joining a private equity consortium to acquire Twitter but is considering providing funding in the form of preferred stock. WSJ also reported that Apollo, which acquired Yahoo last year, internally explored the possibility of collaboration between Twitter and Yahoo if it were to acquire Twitter, but it is uncertain whether Twitter would accept this.

The New York Times (NYT) stated, "Musk has not specifically disclosed how he plans to raise funds given that most of his assets are tied up in stock," adding, "Investors have been skeptical about securing acquisition funds since he would need to borrow $15 billion to $20 billion (approximately 18.5 trillion to 24.7 trillion KRW) from somewhere."

This report of Apollo's potential involvement comes amid a dispute between Musk and Twitter's board. Musk announced on the 14th that he would acquire 100% of Twitter's shares for $43 billion, and the next day, Twitter's board countered by implementing a "poison pill" strategy to block the takeover. In response, Musk has continued to criticize the board.

Meanwhile, sources indicated that Twitter is expected to reject Musk's acquisition proposal within the next few days. Twitter is likely to announce its specific stance on the acquisition proposal when it releases its first-quarter earnings on the 28th. Twitter's stock closed at $48.45 on the New York Stock Exchange that day, up 7.5%, marking the largest increase since the 4th.