The on and off Elon Musk/Twitter deal
Will he or won’t he? After a turbulent week when Tesla CEO Elon Musk made a u-turn and said that he would after all buy Twitter for USD 44 billion, the test of the deal could still go to court, originally scheduled for October 17 but now postponed until October 28. The court has given the parties more time to see if they can agree.
Elon Musk’s turbulent offer to buy Twitter for 44 billion USD entered a new phase when Musk announced that he was backing out of the deal arguing Twitter had not provided enough information about its users. Twitter’s chairman Bret Taylor answered by tweeting that the company intends to finalize the deal that Musk earlier had offered.
Musk has argued that Twitter has breached the deal because it will not share with him enough information to back up its claim that spam or fake accounts constitute less than 5% of its active users. Twitter has stood by this estimate that it is less than 5% but also said it’s possible the number of these accounts is higher.
Bret Taylor said the company will go to court and want to finalize the deal as earlier announced:
“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. We are confident we will prevail in the Delaware Court of Chancery.”
Musk’s Twitter ambitions were first discovered in early April when he announced that he bought a large number of shares in the company and was the company’s biggest shareholder.
Following normal procedures, Twitter management offered him a position as member of the board of directors. After some discussions, Musk said he would not join the board but offered to buy all of the company for the amazing amount of 44 billion USD.
The troubles started with the discussions about how many of Twitter’s accounts could be fakes or bots. Twitter management said less than 5% but Musk indicated it could be much higher and insisted the management proved its statement.
After Musk’s u-turn saying he is willing to go ahead with the deal, it’s unclear if the Musk/Twitter story will come to an end before the deal is tested in court.
Poynter Institute quoted John Coffee, a professor of law at Columbia University in New York: “If he (Musk) tries to negotiate some delay … Twitter can say that we are ready to present our case on 17 October. Everyone knows that Musk is volatile and could change his mind again and they are staying prepared.”
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