Bright Times News: Elon Musk changed his mind about wanting to back out of the transaction and is now trying to buy Twitter Inc. for the initial price of $54.20 per share. By doing this, he may have avoided a protracted legal battle.
According to a filing with the Securities and Exchange Commission, Musk made the suggestion in a letter to Twitter on Monday, confirming a report by Bloomberg. Without mentioning explicitly how it will react to Musk, San Francisco-based Twitter said it received the letter and intended to close the purchase at the agreed-upon price.
If Musk’s idea is implemented, Twitter will have a future under the erratic leadership of a billionaire who has spent months publicly criticizing the company’s management, arguing against its worth, and changing his mind. Additionally, it means that his disputed assertions, such as that Twitter lied about the proportion of users who were bots, won’t probably be examined by a judge.
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After closing 22% higher at $52 in New York on Tuesday, Twitter shares decreased 0.6% in premarket trade.
Musk had been attempting for months to cancel his April agreement to purchase Twitter. Shortly after the announcement of the acquisition, the billionaire started displaying symptoms of buyer’s remorse and claimed that Twitter had misled him regarding the size of its user base and the prevalence of automated accounts known as bots.
Twitter filed a lawsuit against Musk in Delaware Chancery Court to compel him to complete the purchase after Musk formally terminated the agreement in July. The trial was supposed to start on October 17.
On Tuesday, the Delaware judge requested a response from all parties outlining how she should move the matter forward. According to a person with knowledge of the situation, the alternatives include having Twitter ask for the lawsuit to be dismissed or retaining jurisdiction up until the deal is finalized.
Musk and his backers “plan to proceed to conclusion of the transaction contemplated by the April 25, 2022, merger agreement, on the terms and subject to the conditions set out therein,” Musk’s attorneys stated in the letter.
The plan also requires him to secure the required debt funding and a “quick stay of the proceedings” from the court. For banks, this is a challenging time to sell debt. Banks led by Morgan Stanley may be liable for hundreds of millions of dollars in losses on the unsecured portion alone given the multiyear high rates if they try to sell it to investors.
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