Elon Musk has unveiled a $46.5 billion financing plan to fund his Twitter takeover bid as he pursues a deal that would be one of the biggest leveraged buyouts in history.

Tesla’s billionaire CEO took on $25.5 billion in debt – including a $12.5 billion margin loan against his shares in the electric vehicle maker – from a group of banks led by Morgan Stanley , his financial adviser.

Separately, it said it would provide $21 billion in equity for the deal, according to Securities and Exchange Commission filings on Thursday, though it did not provide further details on the deal. origin of this part of the financing.

The offer effectively puts Musk on the hook for $33.5 billion of the financial package, or more than 70%, although he may bring in co-investors to fund the equity portion of the deal.

Securing funding is a crucial step for the maverick entrepreneur who made a hostile $43 billion bid to take Twitter private last week. Achieving a deal would turn Musk into a social media baron with the power to control what he has defined as the world “de facto public place of the city”.

The San Francisco-based social media group acknowledged receiving Musk’s “updated, non-binding proposal” but gave no formal response other than to say its board was “committed to proceeding with a careful, complete and deliberate examination” of the offer.

However, Twitter’s board has already lifted its defenses against Musk. Last Friday he tossed out a “poison pill” that would prevent a hostile takeover by making it highly unprofitable for anyone to buy more than 15% of Twitter stock on the open market.

Musk is expected to use the financial package to launch a takeover bid to all Twitter shareholders in the coming days, a move that will put pressure on the social media company’s board to negotiate with him. .

Musk lined up a dozen lenders — including Bank of America, Barclays, MUFG and Credit Suisse — to provide the secured debt and margin loan against $62.5 billion of his Tesla stock. The debt package includes a $6.5 billion senior bank loan, a $500 million revolving credit facility and $6 billion split between secured and unsecured bridge loans from seven of the banks.

Twitter has hired JPMorgan Chase and Goldman Sachs to advise on the hostile bid.

Now that Musk has assembled an initial financial package, private equity investors will assess whether they try to participate in the financial package, either as debt holders or as equity partners.

Software buyout group Thoma Bravo, which has more than $100 billion in assets, has begun talking with Musk about joining its buyout effort, according to a source familiar with the matter. The prospect of his participation in Musk’s bid, which was first reported by the New York Post, would be key to the bid securing additional debt and equity financing from institutional investors, according to several leading lenders. Thoma Bravo declined to comment.

Private credit market lenders told the Financial Times they expect it could absorb more than $10 billion in debt and billions more in preferred share commitments.

Given the risk of the $13 billion in debt used to fund the deal, many of the banks financing the offer are expected to try to quickly sell that debt to third-party investors, including private credit managers such as Apollo Global. Management.

Other big lenders such as Blackstone Credit waited for a financial package to emerge before deciding whether to participate, people familiar with their thinking said.

The privatization of Twitter remains a controversial investment within the buyout industry, with some of the industry’s biggest players such as Blackstone, Vista Equity Partners and Brookfield Asset Management unwilling to participate in an equity offering, analysts said. sources at the FT.

Silver Lake and Elliott Management, two major shareholders who backed Twitter chief executive Parag Agrawal when he took over from co-founder Jack Dorsey in November, did not say whether they had any interest in participating in the deal. takeover bid by Musk.

Twitter shares were mostly flat by mid-morning Thursday.

With additional reporting from Sujeet Indap