Twitter Rejects Elon Musk’s Third Try to Invalidate His Acquisition of the Company

As the maxim goes: If at first you don’t succeed, attempt once more. And once more. Elon Musk made a 3rd try and again out of his messy, ongoing $44 billion acquisition of Twitter on Friday. The firm circled and denied the declare on Monday.

The richest man on Earth alleged that Twitter’s $7 million payout to ex-executive (and to-be whistleblower), Peiter “Mudge” Zatko, following the safety head’s departure from the corporate, was a violation of their Merger Agreement.

In a letter to Twitter filed with the Securities and Exchange Commission, Musk’s authorized staff wrote:

In Section 6.1(e) the Merger Agreement, Twitter covenanted that between signing and shutting it could not “except as required pursuant to existing Company Benefit Plans… grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice and subject to the execution and non-revocation of a release of claims in favor of the Company and its Subsidiaries.” The definition of “Company Service Provider” contains Twitter’s former staff. Under Section 7.2(a) of the Merger Agreement, Defendants usually are not obligated to shut if Twitter has not “performed or complied, in all material respects, with its obligations required under this Agreement.”

In response, the corporate filed their own letter with the SEC. “As was the case with both your July 8, 2022 and August 29, 2022 purported notices of termination, the purported termination set forth in your September 9, 2022 letter is invalid and wrongful under the Agreement,” Twitter’s attorneys wrote.

The firm went on to assert Musk and “Musk Parties” have breached the Merger Agreement a number of instances over, and that the acquisition contract continues to be legitimate. “Twitter again demands that Mr. Musk and the other Musky Parties comply with their obligations under the Agreement,” its attorneys wrote.

Previously, Musk’s authorized staff tried to void the acquisition by claiming that Zatko’s whistleblower criticism itself violated the phrases. And, earlier than that, Musk alleged that the variety of bots on the platform was grounds for terminating his Twitter buy.

Neither try proved instantly efficient, and Twitter responded to the primary by suing Musk in Delaware’s Court of Chancery. In that ongoing swimsuit, the defendants lately efficiently petitioned to incorporate Zatko’s criticism of their case. The whistleblower has been subpoenaed to testify within the trial, which is scheduled to final 5 days starting October 17.

But (fortunately?) we received’t have to attend till then for extra Musk/Twitter drama. A special company shareholder assembly is scheduled for Tuesday (i.e. tomorrow) at 10a.m. Pacific/ 1p.m. Eastern. At the assembly, all Twitter stockholders will likely be requested for vote for or in opposition to Musk’s acquisition of the platform. Shareholders stand to realize rather a lot, if the merger goes by means of, particularly $54.20 per share within the firm, which is hovering round 30% greater than the current market value.

The protracted, extremely publicized authorized battle between Musk and Twitter has had clear penalties for the corporate. The unresolved query of whether or not or not the merger will undergo has despatched shockwaves by means of the social media web site’s inventory values and led to layoffs in addition to some employees quitting on their very own.