Posted by Kieran Durkin.
A Delaware Chancery Court judge ruled Thursday that Elon Musk has until Oct. 28 to close his acquisition of Twitter if he wants to avoid a trial, granting Musk a slight delay. He asked Twitter to end all litigation to close the deal, but they did not agree. He wanted them to change the original court date from 10/17 to 10/28 so he can secure the finances necessary, and Musk believes the trial will distract him from obtaining the finances he needs. After Twitter responded, lawyers said Musk’s team intended to close.
Twitter then claimed that Musk’s “proposal is an invitation to further mischief and delay.” Twitter had already sued Musk in July so he could stick to his purchase agreement signed in April. His text messages revealed he was ready to take this case to court. Twitter agreed to his offer in September, but they may walk away from the lawsuit since all the finances may not be situated in time. Morgan Stanley and Bank of America are among the banks that originally agreed to provide $12.5 billion in debt for Musk. Since then, the markets have tanked, particularly for risky tech assets.
Musk’s attorney thinks funding will be available by 10/28, so the deal should close. “The lawyers added that “counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligations under the Bank Debt Commitment Letter on the terms and subject to satisfaction of the conditions set forth therein.” Each party should prepare to sort out finances on behalf of the terms of the Bank Debt Commitment Letter. Twitter agreed to close the transaction at $54.20 a share, and this is the first time they have spoken on the issue in a while.
Kieran is a finance major at the Stillman School of Business, Seton Hall University, Class of 2025.