As Tesla Inc TSLA CEO Elon Musk’s takeover of Twitter Inc TWTR inches closer, banks have reportedly begun to send cash in order to back the deal.
What Happened: Late Tuesday, Musk sent a borrowing notice to banks, which led to the initiation of a process now underway, The Wall Street Journal reported, citing people familiar with the matter.
The banks are sending $13 billion in cash to back the $44 billion deal, according to the Journal’s sources, and will deposit funds in an escrow account after finalizing the details of debt contracts.
See Also: How To Buy Twitter (TWTR) Shares
Why It Matters: The closing of the deal wouldn’t end the matter for banks as they are likely to retain the debt rather than sell it to third parties, noted the Journal.
It was reported earlier that Musk told banks through a video call that he plans to close the deal by Friday, the same deadline given by Delaware Court of Chancery Judge Kathaleen McCormick.
Twitter and Musk had gone to court after the Tesla CEO backtracked on the $44 billion deal to purchase the social media platform. Earlier this month, Musk said he would go ahead with the deal.
Price Action: On Wednesday, Twitter shares closed 1.2% higher at $53.42 in the regular session and gained 0.9% in extended trading, according to Benzinga Pro data.
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