Knowing Elon Musk and his flair for the dramatics, it would be a stretch to assume that his standoff with Twitter reached an easy conclusion on Tuesday. Nonetheless, it seems that the billionaire has changed his mind — once again — about acquiring Twitter – a deal that he had himself proposed before backing away later – at the original price of $54.20 per Twitter share, or a total of $44 billion.
In a new filing with the Securities and Exchange Commission (SEC), Musk made it clear that he was backtracking on his recent efforts to inch out of the deal without having to pay the termination fee, and is now willing to proceed with the acquisition of the popular micro-blogging site.
A notice sent by Musk’s attorneys to Twitter’s lawyers read, “We write to notify you that the Musk Parties intend to proceed to close of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby.” The letter has also been filed with the SEC.
Later, on Tuesday, Musk wrote in a tweet that the acquisition of Twitter was “an accelerant to creating X, the everything app.”
Of course, Musk’s decision does not come without caveats. In this case, the catch is this – an end to the legal drama as Twitter drops its lawsuit to force Musk to honor the deal, and the Delaware Chancery Court enters an immediate stay of the same, adjourning the trial and all other proceedings “related thereto pending such closing or further order of the Court.”
Twitter confirmed that it had received the letter from Musk, adding that it intends to close the buyout deal at the price of $54.20 per share. The reveal of this news sent Twitter’s shares soaring before trading was suspended for some time. The shares were up by 12.7% at $47.93 before trading was halted for the second time, and they are currently trading at $52 per share (in close proximity to the agreed-upon price).
This comes just days before a bitter fight is slated to begin at the Delaware court, the prologue of which has already seen multiple face-offs and the reveal of a slew of texts and conversations between Musk, former Twitter CEO Jack Dorsey, current CEO Parag Agarwal, and others. These have been included in the court documents for the highly-anticipated five-day trial beginning October 17.
Of course, if Twitter accepts Musk’s conditions, there will not be a trial to begin with. A courtroom fight is likely to see Twitter emerge as the victor as Musk fights an uphill battle to not acquire Twitter and not have to pay the termination fee. According to Dan Ives, an analyst at Wedbush Securities, Musk’s chance of winning in court was “highly unlikely”, and that being forced to “do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”
