A filing with the Securities and Exchange Commission confirms that Elon Musk has revived the $44 million bid to buy Twitter at the original $54.20 per share price. The filed document is a letter sent to Twitter’s attorney from Musk’s law firm that made the proposal to fulfill the merger agreement signed between the two companies in April 2022.
At the start of this year, Elon Musk acquired 10% of Twitter’s share by investing $3 billion in the company. Later he showed intent to buy the company for $44 billion which was welcomed by Twitter. On April 25, both parties signed a merger agreement.
However, three months into the deal, Musk began to complain about the bots, fake or spam accounts on the platform, and eventually pull out of the deal. Consequently, Twitter sued the billionaire for breaching the agreement and seeking a court order compelling him to honor the deal.
Elon Musk decided to close the Twitter deal to avoid a court trial
According to Bloomberg, Twitter confirmed that it has received the letter and intends to close the deal. Musk’s change of heart is accredited to pretrial rulings which were not going in his favor. More so, the Twitter whistleblower revelations that the company’s executives hide “extreme, egregious deficiencies” from regulators and the board, did not provide legal leverage to his case.
Musk’s legal team was getting the sense that the case was not going well, as Judge Kathaleen St. J. McCormick sided repeatedly with Twitter in pretrial rulings, according to one person familiar. Even with the late emergence of a Twitter whistle-blower who alleged executives weren’t forthcoming on security and bot issues, there were concerns Musk’s side would not be able to prove a material adverse effect, the legal standard required to exit the contract.
The trial is scheduled to begin on October 17 in Delaware. The letter filed at the SEC reads:
Gentlemen:
On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the “Musk Parties”), we write to notify you that the Musk Parties intend to proceed to closing 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, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.
The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close.
Maybe under Elon Musk, users will see a new Twitter. He shared that “buying Twitter is an accelerant to creating X, the everything app” because he wants the platform to be more like TikTok and WeChat to ensure higher user engagement.
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