The New York Post reported Tuesday that Musk, with a 9.1% stake in the social media company, has tapped Morgan Stanley to help raise an additional $10 billion.
Musk’s massive $43 billion bid to purchase the company – or $54.20 per share – may require borrowing against both the company and his stock in addition to raising money from private equity investors, The Post reported, citing two sources close to the situation.
The estimated $10 to $15 billion Musk is reportedly willing to invest is well above his roughly $3.4 billion stake in the company.
The sources told The Post that the co-investors will collectively have more equity in Twitter, but Musk will remain the single largest shareholder.
The co-investors will reportedly finance a hostile tender directly to Twitter shareholders, which happens when an outside investor’s ambitions to take over another company do not have management’s approval or blessing.
Musk will launch the tender officer within roughly 10 days, according to The Post. It remains to be seen how successful Musk will be in raising the necessary cash, as his propensity for controversy has turned off some investors.
Last week, Twitter adopted a measure known as a "poison pill," which refers to a tactic that companies employ to block an investor from accumulating a majority stake in a company.
If any shareholder accumulates a 15% stake in the company in a purchase not approved by the board of directors, other shareholders will get the right to buy additional shares at a discount diluting the roughly 9.1% stake Musk recently purchased.
For Musk’s bid to be successful, he would need to win full approval from a majority of Twitter shareholders.
FOX Business has reached out to Musk for comment but did not hear back before publication. Twitter declined to comment.
Twitter is leaving open the possibility of negotiating with Musk or another suitor. In a regulator filing on Monday, Twitter’s board says the shareholder rights agreement should not interfere with any merger or offer approved by the board.
When he made his offer public, Musk provided no details on financing, but such a disclosure could improve his chances. He could raise money by borrowing billions using his stakes in Tesla and SpaceX as collateral, and he could bring in other investors.
The poison pill would give stockholders as of April 25 the right to buy one one-thousandth of a share of preferred stock for each common share they own, at a price of $210. The rights are triggered if any person or group of investors buys 15% or more of the company's shares without board approval.
The preferred stock would have the same voting rights as a common share, according to the filing, which does not specifically mention Musk.
The Associated Press contributed to this report.