Apollo Global Management is in talks to lead a preferred financing for Elon Musk’s proposed buyout of Twitter, according to people with knowledge of the deal.
That’s despite Musk revealing last week he’s getting $7.1bn in equity commitments from investors including Larry Ellison, Sequoia Capital and Qatar. He persuaded Saudi Prince Alwaleed bin Talal to roll his $1.9bn of Twitter stock into the privatised company and is seeking to do the same with Twitter co-founder Jack Dorsey.
Preferred equity is a hybrid of debt and equity capital that sits above common equity in the capital structure. Some preferred equity is convertible into common shares at a pre-agreed price. Marc Rowan, Apollo’s CEO, touted the attractiveness of hybrid investments in a recent interview with David Rubenstein, saying it offers the best risk versus reward in markets.