Investment firm Apollo Global Management Inc. could back an effort to take Twitter Inc. private, the Wall Street Journal reported late Monday.
Last week, Tesla Inc. Chief Executive Officer Elon Musk made an offer to acquire Twitter for $43 billion. A few days later, it was reported that private equity firm Thoma Bravo LLC has also expressed interest in buying the company. The private equity firm has acquired multiple major tech companies over the last few quarters, including cybersecurity provider Proofpoint Inc., which it bought for $12.3 billion last year.
According to the Journal, Apollo could back Musk’s bid or an offer from another bidder such as Thoma Bravo by providing financing for the transaction.
Apollo is a major investment firm with about $455 billion in assets under management. Sources told CNBC that the firm isn’t interested in joining a private equity consortium to acquire Twitter. The sources added that any financing Apollo may provide to help take Twitter private would likely be provided in the form of preferred equity.
Apollo’s plans may involve Yahoo. Last year, the firm inked a $5 billion deal to acquire Verizon Communications Inc.’s media group, which included Yahoo Finance, other major online properties and a programmatic advertising business, as well as additional assets. Apollo is reportedly exploring “potential cooperation” between Yahoo and Twitter.
Earlier, it was reported that Morgan Stanley could provide debt financing to back Musk’s bid to acquire Twitter. The bank is advising the Tesla CEO on the $43 billion offer. According to the Financial Times, Bank of America, Royal Bank of Canada and Deutsche Bank are studying whether it would be feasible to provide debt financing for a deal to take Twitter private.
In response to Musk’s acquisition offer, Twitter’s board of directors last week adopted a so-called “poison pill” plan. The move will make it more difficult for Musk to buy the company. The plan specifies that if an investor acquires at least 15% of Twitter’s common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount.
Musk has stated that the $43 billion bid for Twitter he submitted last week is his “best and final” offer. Prior to the announcement of the offer, Musk bought a 9.2% stake in the company and became its largest individual shareholder. At one point he also announced plans to join Twitter’s board, but later decided not to become a director.