Twitter (NYSE: TWTR) and Elon Musk seemed to have yet again disagreed on the proposed US$44 billion takeover deal after the social media company is said to have rejected the terms put forth by the billionaire.
The Tesla chief is being sued by the Twitter board for attempting to renege on the agreement to buy Twitter at US$54.20. As the duo heads for legal battle with first trial set on October 17, Musk recently made a sudden 180o and announced through an SEC filing that he would proceed with the deal after all.
Apparently, this is one of his camp’s requirements to honor the original deal: drop the lawsuit.
“There is no need for an expedited trial to order defendants to do what they are already doing,” said Musk’s counsel. “Yet, 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 social media giant, however, maintained it doesn’t want to suspend litigation until the deal pushes through. The firm is concerned about the “theoretical possibility of a future failure to obtain debt financing” on Musk’s part, noting that one bank involved in financing the transaction testified this week that it had gotten no notification from Musk about plans to proceed.
“Defendants can and should close next week,” the company said. “Until defendants commit to close as required, Twitter is entitled to its day in court.”
Twitter said in its complaint that Musk was concerned about the sum he had promised to pay, following a dramatic drop in the value of tech stocks, particularly Tesla, the electric vehicle firm he heads and the source of much of his wealth.
Twitter’s concerns have also been boosted by the recent reports that Apollo Global Management Inc (NYSE: APO) and Sixth Street Partners are backing out of the deal to provide financing. However, Musk quelled the rumor by validating a tweet explaining that the two investment firms were never part of the previously announced equity financing.
Delaware Judge Kathaleen McCormick, who’s handling the case, has postponed the trial to October 28 to give the two parties time to work out a deal.
Twitter last traded at US$49.02 on the NYSE.
Information for this briefing was found via BBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.