Elon Musk looking to use less of his own wealth in Twitter deal, sources say 

The new financing, which could come in the form of preferred or common equity, could reduce the $21 billion cash contribution that Musk has committed, the sources said.

Elon Musk is in talks with large investment firms and high net-worth individuals about taking on more financing for his $44 billion acquisition of Twitter Inc TWTR.N and tying up less of his wealth in the deal, people familiar with the matter said.

Musk is the world’s richest person, with Forbes estimating his net worth at about $245 billion. Yet most of his wealth is tied up in the shares of Tesla Inc TSLA.O, the electric car maker he leads. Last week, Musk disclosed he sold $8.5 billion worth of Tesla stock following his agreement to buy Twitter.

The new financing, which could come in the form of preferred or common equity, could reduce the $21 billion cash contribution that Musk has committed to the deal as well as a margin loan he secured against his Tesla shares, the sources said.

The banks that agreed last month to provide $13 billion in loans based on Twitter’s business balked at offering more debt for Musk’s acquisition given the San Francisco-based company’s limited cash flow, Reuters reported last month.

Musk has also pledged some of his Tesla shares to banks to arrange a $12.5 billion margin loan to help fund the deal. He may seek to trim the size of the margin loan based on the new investor interest in the deal financing, one of the sources said.

Major investors such as private equity firms, hedge funds and high net-worth individuals are in talks with Musk about providing preferred equity financing for the acquisition, the sources said. Preferred equity would pay a fixed dividend from Twitter, in the same way that a bond or a loan pays regular interest but would appreciate in line with the equity value of the company.

Apollo Global Management Inc APO.N and Ares Management Corp ARES.N are among the private equity firms that have been in talks about providing the financing, the sources added.

Musk is still deciding whether he will have partners team up with him in writing the equity check needed for the deal, the sources said. Musk is not seeking to take on more debt for the Twitter deal currently, the sources added.