After long months of trying to get out of his $44 billion deal for Twitter, the world’s richest man resounded his interest in completing the deal, and at its original price. Via a letter sent to Twitter by representatives of Elon Musk, Twitter was notified that the Tesla and Space X boss intended to move forward with the deal to acquire the company. The notice which was filed with the Securities and Exchange Commission (SEC) reads, “We write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein.”
On Thursday, a Delaware Chancery Court judge ruled that billionaire Elon Musk has until the 28th of October to complete his bid for Twitter if he’s to avoid a trial. Elon Musk’s desire to acquire Twitter after stalling came with a condition. The condition is that Twitter ends all litigation. In his filing with Delaware’s Court of Chancery on Thursday, Elon Musk wanted Twitter to drop the court date scheduled for October 17, so that the necessary financing can be pulled together to wrap up the acquisition by Oct. 28. “Twitter will not take yes for an answer. Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests,” the filing said. Elon Musk argued that the trial would distract his team from securing the financing necessary to close the deal.
Twitter, in response to this filing said that Elon Musk and his team were being indigenous, that only days to when the trial begins his team declares “they intend to close after all.” Twitter said ″Trust us,’ they say, ‘we mean it this time,’ and so they ask to be relieved from a reckoning on the merits. To justify that relief, they propose an order that allows them an indefinite time to close on the basis of a conditional withdrawal of their unlawful notices of termination coupled with an explicit reservation of all ‘claims and defenses in the event a closing does not occur.’“ Twitter’s lawyers added that the billionaire’s “proposal is an invitation to further mischief and delay.”
Twitter sued Elon Musk in July for failing to proceed with his bid to acquire Twitter. Elon Musk noted that Twitter bots alongside the absence of ample information from Twitter to evaluate the deal were the reason for his delay turned termination. With no evidence to support his claim, Elon Musk said that up to 20 percent of Twitter’s user base was made up of fake or spam accounts while Twitter continued to reiterate less than 5 percent of its monetizable daily active accounts were bots. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” Twitter’s board chairman said in response to this. The company has also alleged that Elon Musk was refusing “to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests” after entering a binding merger agreement. This may no longer be the case as Elon Musk is ready to go through with the deal.
Twitter may now be reluctant to walk away from the lawsuit and may want to continue the trial. Elon Musk’s lawyers said that “By far the most likely possibility is that the debt is funded in which case the deal will close on or around October 28,” adding that “counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligations under the Bank Debt Commitment Letter on the terms and subject to satisfaction of the conditions set forth therein.”
In a filing, Twitter said that Elon Musk’s side “should be arranging to close on Monday, October 10,” but is instead refusing to “commit to any closing date.”
“They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract ‘[w]ithout any admission of liability and without waiver of or prejudice to [their] claims and defenses,’” Twitter’s lawyers wrote.
They also alleged that an unnamed corporate representative of one of the leading banks involved in the deal “testified that Mr. Musk has yet to send them a borrowing notice and has not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline.”
“The bank further testified that the main task necessary to close the deal —memorializing the debt financing — could have happened in July but didn’t because Mr. Musk purported to terminate the deal,” Twitter’s lawyers added.