It’s looking more like Elon Musk could bail on buying Twitter
The Washington Post reports that Elon Musk’s $44 billion deal to buy Twitter is “in peril,” based on three anonymous sources who told the paper that the billionaire’s camp has “stopped engaging in certain discussions around funding” for the agreement. Musk isn’t going it alone in his attempt to buy Twitter, with others like Larry Ellison, the venture capital firm Andreessen Horowitz, Fidelity, the crypto exchange Binance, and the state investment firm of Qatar among those pitching in a few billion as a part of the effort.
The idea that a “drastic” change of direction on the deal is close to happening is supposedly due to concerns that Twitter’s data regarding spam and bots on the platform is not verifiable. The report comes just hours after Twitter had a conference call with media outlets to explain that its spam account data and technology for blocking bots are just fine, setting up a showdown between the company and its would-be new owner.
It has been just about a month since Twitter gave Musk’s team access to a “firehose” of data to back up its claims that bots represent less than 5 percent of its daily active user count. That access only opened up after a tweet from Elon saying the deal was “on hold,” and Musk’s lawyers sent a letter claiming the company was in “clear material breach” of the acquisition deal by refusing to give him access to the data.
From Twitter’s side, as described over the past few months and again today to reporters, they claim that it may not be possible for external sources to verify their count, as it requires access to information — including account data — that can’t be shared safely.
Breaking the agreement for Musk to purchase Twitter would mean someone owes someone else $1 billion, as laid out in their original agreement. Legal wrangling over who is at fault and whether or not Musk will be allowed to back out could take a long time to be resolved.
Either Twitter or Parent may terminate the Merger Agreement if, among certain other circumstances, (1) the Merger has not been consummated on or before October 24, 2022, which date will be extended for six months if the closing conditions related to applicable antitrust and foreign investment clearances and the absence of any applicable law or order making illegal or prohibiting the Merger have not been satisfied as of such date; or (2) Twitter’s stockholders fail to adopt the Merger Agreement. Twitter may terminate the Merger Agreement in certain additional limited circumstances, including to allow Twitter to enter into a definitive agreement for a competing acquisition proposal that constitutes a Superior Proposal (as defined in the Merger Agreement). Parent may terminate the Merger Agreement in certain additional limited circumstances, including prior to the adoption of the Merger Agreement by Twitter’s stockholders if the Board recommends that Twitter’s stockholders vote against the adoption of the Merger Agreement or in favor of any competing acquisition proposal.
Upon termination of the Merger Agreement under specified limited circumstances, Twitter will be required to pay Parent a termination fee of $1.0 billion. Specifically, this termination fee is payable by Twitter to Parent because (1) Twitter terminates the Merger Agreement to allow Twitter to enter into a definitive agreement for a competing acquisition proposal that constitutes a Superior Proposal; or (2) Parent terminates the Merger Agreement because the Board recommends that Twitter’s stockholders vote against the adoption of the Merger Agreement or in favor of any competing acquisition proposal. This termination fee will also be payable by Twitter to Parent in the event that, generally, (1) a competing acquisition proposal for 50% or more of the stock or consolidated assets of Twitter has been publicly announced and not withdrawn, (2) the Merger Agreement is terminated because Twitter’s stockholders fail to adopt the Merger Agreement or because Twitter materially breaches the Merger Agreement, and (3) within twelve months of such termination of the Merger Agreement, Twitter enters into a definitive agreement providing for a competing acquisition proposal for 50% or more of the stock or consolidated assets of Twitter and such acquisition is subsequently consummated.
Upon termination of the Merger Agreement under other specified limited circumstances, Parent will be required to pay Twitter a termination fee of $1.0 billion. Specifically, this termination fee is payable by Parent to Twitter if the Merger Agreement is terminated by Twitter because (1) the conditions to Parent’s and Acquisition Sub’s obligations to consummate the Merger are satisfied and the Parent fails to consummate the Merger as required pursuant to, and in the circumstances specified in, the Merger Agreement; or (2) Parent or Acquisition Sub’s breaches of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied. Mr. Musk has provided Twitter with a limited guarantee in favor of Twitter (the “Limited Guarantee”). The Limited Guarantee guarantees, among other things, the payment of the termination fee payable by Parent to Twitter, subject to the conditions set forth in the Limited Guarantee.
The Washington Post reports that Elon Musk’s $44 billion deal to buy Twitter is “in peril,” based on three anonymous sources who told the paper that the billionaire’s camp has “stopped engaging in certain discussions around funding” for the agreement. Musk isn’t going it alone in his attempt to buy…
