Musk May Need More Financing to Close Twitter Deal

Apollo Global Management Inc. and Sixth Street Partners, which had been looking to provide financing for Elon Musk's proposed $44 billion buyout of Twitter Inc., are no longer in talks with the billionaire entrepreneur, said two sources familiar with the matter.

Apollo, Sixth Street and other investors had committed more than $1 billion to bankroll the deal. Investment banks have pledged $12.5 billion, and Musk is expected to sell Tesla shares to finance the balance.

Deposition Postponed

The news comes as Musk and Twitter agreed to postpone the billionaire's deposition scheduled for Thursday. The two sides are trying to reach an agreement to end their litigation and close the deal, a source familiar with the litigation said Wednesday.

In a reply to tweets saying that neither of the private equity firms were part of the $7.1 billion of third-party equity financing announced in early May, nor part of the debt financing, Musk said: "correct."

These talks ended months ago, around the time Musk started having second thoughts about the deal, sources told Reuters. Musk initially proposed the buyout in April before backtracking in July and then changing course again this week.

Musk and Twitter are attempting to reach an agreement after months of litigation that damaged Twitter's brand and fed Musk's reputation for erratic behavior.

Inopportune Market Environment

Twitter and Musk did not immediately respond to requests for comment, as did Apollo and Sixth Street.

Musk's U-turn on buying Twitter could not have come at a worse time for the banks funding a large portion of the $44 billion deal; they could face significant losses because of an unfavorable financing environment.