Twitter Says Musk Signed Deal Without Asking for More Information

Twitter printed its account on Tuesday of its deal negotiations with Elon Musk, displaying he opted out of asking the questions in regards to the social media firm’s enterprise he has now cited in declaring the $44 billion (roughly Rs. 3,40,923 crore) acquisition is “on hold.”

The account, printed in Twitter’s proxy assertion that outlines what shareholders must know to vote on the deal, paints an image of Musk in a rush to clinch a cope with his “best and final” supply.

Musk negotiated the Twitter deal over the weekend of April 23 and April 24 with out finishing up any due diligence, the proxy assertion exhibits.

Since signing the deal on April 25, Musk has questioned the accuracy of Twitter’s public filings about spam accounts representing lower than 5 % of its consumer base, claiming they have to be at the least 20 %. This is regardless of Twitter stating in its filings that the numbers could possibly be greater than it estimates.

Independent researchers have projected that 9 % to fifteen % of the thousands and thousands of Twitter profiles are bots.

Musk tweeted on Tuesday that Twitter Chief Executive Parag Agrawal has refused to indicate proof for his firm’s estimate and that the deal can not transfer ahead till he does. Twitter’s proxy assertion exhibits that within the run-up to the deal Musk made no effort to get details about the difficulty.

“Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter,” Twitter mentioned in its proxy assertion.

The proxy assertion makes no point out of threats Musk has tweeted about not going forward with the deal if he doesn’t unravel what number of spam accounts are on the platform.

Twitter buyers appeared satisfied {that a} deal on the agreed worth was now out of the query. Twitter shares have been buying and selling round $37.55 (roughly Rs. 2,900) on Tuesday afternoon, a reduction of greater than 30 % to the $54.20 (roughly Rs. 4,200) per share deal worth.

Musk instructed for the primary time on Monday at a convention in Miami that the deal could possibly be achieved at a cheaper price, with out specifying what that could possibly be. He has but to tell Twitter that he needs to renegotiate the deal.

Legal consultants have mentioned Musk would seemingly lose in court docket if he tried to stroll away from a deal. But they are saying that any litigation would seemingly be protracted and forged uncertainty over Twitter’s enterprise. Even corporations which have prevailed in court docket over their acquirers have ended up negotiating monetary settlements.

Musk is contractually obligated to pay a $1 billion (roughly Rs. 7,750 crore) break-up payment if he doesn’t full the deal, however Twitter can sue for “specific performance” to power Musk to finish a deal and acquire a settlement from him consequently.

Ann Lipton, a professor at Tulane University Law School, mentioned the truth that Musk had not requested Twitter for data earlier than signing the deal meant he would now have to indicate that the corporate’s public filings have been fallacious and posed vital long-term monetary points — a excessive authorized bar.

“Twitter has long said ‘this is our estimate of spam but we might be wrong.’ So it’s not clear that they said anything false,” Lipton mentioned.

COMMITTED TO THE DEAL

Twitter mentioned on Tuesday it remained dedicated to the deal on the agreed worth and anticipated it to be accomplished in 2022.

The San Francisco-based firm mentioned in its proxy assertion that Musk expressed his curiosity in becoming a member of its board or taking it non-public on March 26. This would point out that Musk mischaracterised his stake of greater than 9 % in Twitter as passive when he revealed it in a regulatory submitting on April 4. He subsequently clarified it was an energetic stake.

Representatives of Musk didn’t reply to requests for remark.

Musk additionally instructed Twitter that he contemplated beginning a competitor, based on the proxy assertion.

Twitter’s CEO, Agrawal, is entitled to a $60.2 million (roughly Rs. 466 crore) golden parachute if the deal closes, whereas the corporate’s chief monetary officer, Ned Segal, would get $46.4 (roughly Rs. 360 crore) million, the proxy exhibits. Twitter’s high lawyer, Vijaya Gadde, can be paid $30 million (roughly  Rs. 232 crore).

Goldman Sachs Group Inc stands to be paid $65 million (roughly Rs. 503 crore) for advising Twitter as soon as the deal is accomplished, having already been paid $15 million (roughly Rs. 116 crore), the proxy assertion exhibits.

Another Twitter adviser, JPMorgan Chase & Co, stands to be paid $48 million (roughly Rs. 372 crore) as soon as the deal closes, having already made $5 million (roughly Rs. 39 crore) for its equity opinion to the corporate.

© Thomson Reuters 2022