Musk to go ahead with Twitter acquisition deal: SEC filing
4 Min Read
Twitter could end up in Elon Musk's hands not too long from now, as the billionaire tries to dodge paying billions on thin air.
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Billionaire Elon Musk attends The 2022 Met Gala
SpaceX and Tesla CEO Elon Musk, the billionaire that has been in the eye of the storm various times due to his eccentric nature, looks like he could be running Twitter not too long from now.
Musk told the social media giant that he would be going ahead with his agreement to buy the social media platform, potentially dodging a trial that would have cost him heavily due to his non-compliance with the deal he struck with Twitter, according to a filing with the Securities and Exchange Commission (SEC) on Tuesday.
Twitter shareholders approved in early September during a special meeting Musk's $44 billion bid to acquire the social media giant after a lot of disputes from both sides about the sale.
The shareholders approved a proposal adopting Musk's agreement and plan of merger and a second proposal approving a non-binding advisory basis for the compensation that Twitter's named executive officers would get due to the merger, Twitter General Counsel Sean Edgett said.
"We received the letter from the Musk parties which they have filed with the SEC. The intention of the Company is to close the transaction at $54.20 per share," Twitter said in a statement.
News that Musk would be fulfilling his end of the deal sent Twitter's shares up almost 22%.
He was contemplating for months whether he should go on with the deal, claiming that he wanted to pull out from the deal after raising claims of fraud, alleging that the firm had been misleading regarding key aspects of its business, in particular the number of active and spam or bot accounts.
Meanwhile, Twitter has slammed Musk's attempts at walking away from the deal even if the bot count is found to be wrong due to this not being a clause in the buyout offer the billionaire had made.
The tech giant has also accused Musk of making up the story to try and escape a merger deal that he was no longer interested in.
Records made public earlier showed that the former chief of Twitter was served with a legal order demanding that he give Musk any communications on documents linked to the takeover deal, in addition to information relating to false or spam accounts or how Twitter calculates how many active users it has.
Musk's legal team had warned a month ahead of the withdrawal that he could walk away from the negotiations table over acquiring Twitter if the big tech firm continues dismissing his demands to be more explicit about the number of fake and spam accounts on the platform. The news of the entrepreneur potentially dropping the deal caused Twitter shares to dip by 5%.
The deal, however, does have a clause obliging the party breaking the agreement - if it were to fall apart - to pay a termination fee of $1 billion.
Musk said earlier this month that if Twitter was able to provide its method of sampling 100 accounts and how it verified that the accounts are real, the $44 billion deal should proceed in accordance with its original terms.
Depending on who wins the case, either Musk or Twitter will be entitled to receiving a breakup fee if the other party is found responsible for the failed agreement.
Therefore, Musk must be complying with the original deal so that he does not have to pay a billion dollars out of his own pocket or spend millions on a potentially losing court battle that will culminate with him paying the billion on top of legal fees.
