But while Elon Musk’s $44 billion planned takeover of Twitter is an LBO, it differs from most in several important respects. Here’s a look at the complicated transaction pulled together by the Tesla Inc. chief executive, and how it differs from normal LBOs. LBOs also increase the buyer’s upside because they can acquire bigger companies than they otherwise would have been able to afford. When Musk’s current stake in Twitter is excluded, his proposed purchase would be the fourth-largest deal in which a public company was bought and taken private. The banks funding the $13 billion debt portion will eventually need to convince investors in credit markets that Twitter will be able to pay its new loans and bonds back.

Source: Washington Post April 27, 2022 20:10 UTC