Twitter shareholders support Elon Musk’s proposal.
According to a document that was submitted to a regulatory body on Tuesday, Elon Musk has changed his mind and is now offering to purchase Twitter at a price of $54.20 per share. As a result of the announcement, Twitter share prices finished the day up more than 22%.
A statement was sent by the social networking giant confirming that it had received the letter and stating that “the goal of the Company is to close the transaction at $54.20 per share.”
According to individuals, a deal may be finalised as soon as this Friday. Following the first report by Bloomberg that the Tesla CEO intended to move forward with his bid to acquire the company, trading in the stock was halted earlier in the day.
According to the document filed with the SEC, Musk notified Twitter on Monday of his intention to move forward with the transaction that was agreed upon on April 25 — the same day that the deal was made public. He did so by sending the firm a letter.
A few weeks after Musk agreed to that offer, which would have valued Twitter at $44 billion, he rapidly tried to back out, publicly telling the firm in July of his plans to terminate the agreement. This came after he agreed to the deal that would have valued Twitter at $44 billion. Twitter filed a lawsuit against Musk in an attempt to compel him to complete the purchase. On October 17, the case was going to be heard in the Delaware Chancery Court by both of the opposing parties.
Musk claimed that Twitter was exaggerating the amount of automated accounts, or “bots,” that were using its site, which was one of the reasons he was backing out of the agreement. It was alleged by him and his legal representatives that the social media company was deceiving investors by submitting incorrect statistics in corporate filings with the Securities and Exchange Commission.
Twitter, in response, stated that Musk’s allegations of fraud were false and were founded on a misunderstanding of the manner in which the business counts the number of bots and phoney accounts that exist on its platform.
Musk further claimed that Twitter did not supply him with the essential data relating to spam and bots, which is a claim that Twitter categorically refuted.
When the company’s shares declined in tandem with a wider downturn in the overall market, Twitter suggested that Musk was seeking for a pretext to pull out of the deal.
Musk requested a postponement of the trial date, but Delaware Chancellor Kathaleen McCormick denied his request, citing the possibility that Twitter could suffer “irreparable injury” as the reason for her decision. Musk and his attorneys were granted permission by the chancellor to amend their counterclaim in order to include certain allegations that were made by Twitter’s former head of security in a separate whistleblower complaint that was filed against the corporation.
In September, Twitter shareholders gave Elon Musk their blessing to purchase the firm with his initial offer.
On October 3, legal counsel for Musk, represented by Mike Ringler of Skadden Arps, wrote the following letter to legal counsel for Twitter:
Gentlemen:
On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the “Musk Parties”), we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.
The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close
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