Twitter Will Hold Musk To $63B Sale
Elon Musk announced earlier this week that his A$63.1 billion Twitter takeover “cannot move forward” until the company can provide data proving its estimates regarding spam accounts.
He added that it was “not out of the question” for the price to be renegotiated, and he is “still committed to acquisition.”
Twitter, however, aren’t having any of this, and will enforce the purchase at the original US$44 billion price.
“The Board and Mr. Musk agreed to a transaction at $54.20 per share,” the Twitter board said in a statement.
“We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.
“Twitter is committed to completing the transaction on the agreed price and terms as promptly as practicable.”
Twitter claims that >95% of daily active users are real, unique humans. Does anyone have that experience?
— Elon Musk (@elonmusk) May 17, 2022
Musk can still exit the deal if he is willing to pay a breakup fee of US$1 billion to Twitter. In that case he “fails to consummate the Merger as required pursuant to, and in the circumstances specified in, the Merger Agreement” and owes the fee.
Even after paying the billion, Twitter can still sue, thanks to a provision in section 9.9 of the deal. Twitter “shall be entitled to specific performance or other equitable remedy” to “cause the Equity Investor [Musk] to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing.”
Therefore, Twitter would “be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.”
Of course, none of that is likely to actually impact Musk’s final decision. As always, he will do as he pleases.