Venetian Operator Apollo Reportedly Involved in Financing Musk Twitter Takeover

Posted on: May 11, 2022, 08:03h. 

Last updated on: May 11, 2022, 03:07h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Private equity firm Apollo Global Management (NYSE:APO), which operates the Venetian integrated resort on the Las Vegas Strip, is rumored to be in talks to contribute financing for Elon Musk’s $44 billion takeover of Twitter (NYSE:TWTR).

Musk Twitter
Elon Musk at the recent Met Gala in New York. Apollo Global could contribute financing for his acquisition of Twitter. (Image: Wall Street Journal)

Musk’s bid for the social media company is eliciting baseless, unfounded fears of threats to democracy on the left, and optimism about free speech on the right. However, it’s far from a done deal. While the Tesla (NASDAQ:TSLA) founder and chief executive officer is the world’s richest person, Musk is actively pursuing financing options for the acquisition.

Unidentified sources with knowledge of the discussions tell Bloomberg funding from Apollo could come in the form of a preferred stock issue and be north of $1 billion. Sixth Street Partners and other firms could also be involved.

It’s not clear how the preferred equity might change the existing financing proposal, which requires Musk and his partners to contribute $27.25 billion in equity to fund the $44 billion purchase, with the rest coming from junk-rated debt and a margin loan tied to Musk’s Tesla stock,” Bloomberg reported.

Musk’s net worth is nearly $232 billion. But much of that fortune is tied to Tesla shares, and he can only sell so much of that stock to fund the Twitter acquisition before the electric vehicle maker’s investors fret. They already are, as Tesla shed more than a quarter of its value since Musk revealed his Twitter offer.

Gaming, Las Vegas Ties Abound

The potential takeover of Twitter doesn’t directly involve the gaming industry. But between Apollo and Musk, Las Vegas and wagering business ties abound.

The private equity company operates Venetian, Palazzo and Venetian Expo, and is frequently at the epicenter of a variety of industry consolidation rumors. Apollo also owns Canadian casino operator Great Canadian Gaming Corp., Italian digital gaming, gaming machine, and sports wagering operator Lottomatica Videolot Rete S.p.A. and Lottomatica Scommesse S.r.l.

The investment firm is also rumored to be looking for a sportsbook partner for Yahoo! Sports. Over the past couple of years, the private equity company was attached to multiple sports betting consolidation rumors, including William Hill, the British bookmaker’s international business, and media and sports wagering assets in Australia, among others.

As for Musk, his Boring Company’s underground tunnel system is making it easier to navigate the Las Vegas Convention Center. Boring’s Vegas Loop project is even more ambitious and could ultimately link the Strip with other popular destinations, including Allegiant Stadium and Fremont Street.

More Gaming Ties

There are other gaming industry ties in the Musk/Twitter equation. Twitter director Egon Durban, who along with the rest of the board initially rejected Musk’s takeover proposal, is involved with the wagering business.

He’s chairman of the board of Endeavor Group Holdings, Inc. (NYSE:EDR), the parent company of the Ultimate Fighting Championship (UFC). Endeavor also acquired the OpenBet sports platform from the company, then known as Scientific Games, for $1.2 billion in September 2021.

Durban is the co-chief executive officer of Silver Lake. That investment firm holds a stake in Fanatics, which has long been rumored to be an eventual player in the sports betting industry.