By TOM KRISHER, MATT O’BRIEN and RANDALL CHASE
The tumultuous saga of Elon Musk’s on-again off-again buy of Twitter took a flip towards a conclusion Tuesday after the mercurial Tesla CEO proposed to purchase the corporate on the initially agreed-on worth of $44 billion.
Musk made the proposal in a letter to Twitter that the corporate disclosed in a submitting Tuesday with the U.S. Securities and Exchange Commission. It got here lower than two weeks earlier than a trial between the 2 events is scheduled to start out in Delaware.
In a press release, Twitter stated it intends to shut the transaction at $54.20 per share after receiving the letter from Musk.
Trading in Twitter’s inventory, which had been halted for a lot of the day pending launch of the information, resumed buying and selling late Tuesday and soared 22% to shut at $52.
Musk’s proposal is the newest twist in a high-profile saga involving the world’s richest man and one of the influential social media platforms. Much of the drama has performed out on Twitter itself, with Musk — who has greater than 100 million followers — lamenting that the corporate was failing to stay as much as its potential as a platform totally free speech.
A letter from Musk’s lawyer dated Monday and disclosed by Twitter in a securities submitting stated Musk would shut the merger signed in April, offered that the Delaware Chancery Court “enter an immediate stay” of Twitter’s lawsuit in opposition to him and adjourn the trial scheduled to start out Oct. 17.
By finishing the deal, Musk basically gave Twitter what it was looking for from the courtroom — “specific performance” of the contract with Musk, which means he must undergo with the acquisition on the authentic worth. The contract Musk signed additionally has a $1 billion breakup charge.
Eric Talley, a regulation professor at Columbia University, stated he’s not stunned by Musk’s turnaround, particularly forward of a scheduled deposition of Musk by Twitter attorneys beginning Thursday that was “not going to be pleasant.”
“On the legal merits, his case didn’t look that strong,” Talley stated. “It kind of seemed like a pretty simple buyer’s remorse case.”
If Musk had been to lose the trial, the decide couldn’t solely drive him to shut the deal but in addition impose curiosity funds that will have elevated its price, Talley stated.
What did shock Talley is that Musk doesn’t seem like attempting to renegotiate the deal. Even a modest worth discount might need given Musk a “moral victory” and the power to say he bought one thing out of the protracted dispute, Talley stated.
Neither Twitter nor attorneys for Musk responded to requests for remark Tuesday.
Musk has been attempting to again out of the deal for a number of months after signing on to purchase the San Francisco firm in April. Shareholders have already accredited the sale, and authorized specialists say Musk confronted an enormous problem to defend in opposition to Twitter’s lawsuit, which was filed in July.
Musk claimed that Twitter under-counted the variety of pretend accounts on its platform, and Twitter sued when Musk introduced the deal was off.
Musk’s argument largely rested on the allegation that Twitter misrepresented the way it measures the magnitude of “spam bot” accounts which are ineffective to advertisers. Most authorized specialists imagine he confronted an uphill battle to persuade Chancellor Kathaleen St. Jude McCormick, the courtroom’s head decide, that one thing modified for the reason that April merger settlement that justifies terminating the deal.
Legal specialists stated Musk might have anticipated that he would lose. Things haven’t been going nicely for him in courtroom just lately, with the decide ruling extra regularly in Twitter’s favor on evidentiary issues, stated Ann Lipton, an affiliate regulation professor at Tulane University. The decide’s denied a number of of Musk’s discovery requests, Lipton stated.
It’s additionally attainable that Musk’s co-investors within the deal had been beginning to get nervous about how the case was continuing, she stated.
Musk’s important argument for terminating the deal – that Twitter was misrepresenting the way it measured its “spam bot” drawback – additionally didn’t seem like going nicely as Twitter had been working to select aside Musk’s makes an attempt to get third-party information scientists to bolster his issues.
Columbia’s Talley stated he would insist on Musk placing cash into an escrow account till the deal is accomplished. Such an account may maintain money and/or Twitter shares, as a good-faith demonstration by Musk, Talley advised.
Mysteriously, neither Musk nor Twitter CEO Parag Agrawal have written something in regards to the deal on Twitter, the place many developments within the dispute have been aired. Many of Musk’s tweets previously 24 hours have been a couple of divisive proposal to finish Russia’s invasion of Ukraine, drawing the ire of Ukrainian President Volodymyr Zelenskyy.
If the deal does undergo, Musk could also be caught with an organization he broken with repeated statements denouncing pretend accounts, Susannah Streeter, senior markets analyst for Hargreaves Lansdown within the United Kingdom, wrote in an investor observe.
“This is an important metric considered to be key for future revenue streams via paid advertising or for subscriptions on the site, and his relentless scrutiny of Twitter’s figures over the last few months is likely to prompt questions from potential advertising partners,” she wrote.
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Marcy Gordon in Washington contributed to this report.
Source: www.bostonherald.com”