The time is running out for Elon Musk to back out of his first $44 billion acquisition of Twitter Inc. offer.
The world’s richest man hurried to purchase the social network in April before abruptly changing his mind. He then attempted to totally exit the contract for months.
The parties recently discussed a price that was around $4 below the $54.20 per-share deal, but they were unable to agree on further details, according to people familiar with the issue.
In an effort to avoid a court dispute on October 3, Musk put the company under public pressure by formally re-offering to buy it for the initial price.
As soon as investors realised the drama was almost over, Twitter’s shares soared. The stipulations in Musk’s letter, such as the requirement that Twitter dismiss its lawsuit, raised suspicion among the company’s attorneys, who dubbed it “an invitation to more mischief.”
Musk tweeted, “Plot twist.”
Twitter’s lawyers rushed behind the scenes to confirm Musk’s newfound interest in the acquisition, confirming that he had indeed approached lenders for the money they had previously promised (one bank claimed he hadn’t, according to Twitter).
While Twitter employees, still in limbo, resorted to memes and morbid humour to get through the week, the same huge banks tried to calculate probable losses based on the months-old contract terms.
By the evening of October 6, the billionaire had finally gotten what he desired: a postponement of the trial.
In full view of the public and the media, a judge would have carefully considered all of his justifications for walking away from the arrangement there. In exchange, the court set a fresh deadline for Musk to fulfil his obligations as of October 28. He’ll probably testify in November if he and Twitter don’t consummate the transaction by then.
Musk gains time with the shift. Additionally, it moves the potential payout for Twitter shareholders closer if he really doesn’t want to go to court. According to Kevin Stadtler, CEO of Twitter investor Stadtler Capital, “At $54.20 cash deal price closing this year, it is wonderful to be long TWTR!” he wrote in an email.
Still, there’s “a 10% probability that Musk is attempting a cunning move.”
