The twitter sale remains unchanged, as defined a few weeks ago. Despite Elon Musk’s claims in which he suggests that the operation was paused, Vijaya Gadde, a lawyer for Twitter, told his employees that the purchase is moving forward and that they will not renegotiate the originally agreed price.
In accordance with Bloomberg, the company met with its employees to communicate the details of the sale. In the video call, Twitter’s lawyer mentioned that there is no such thing as pause the deal, as Elon Musk declared a few days ago. Gadde was emphatic that the company will not renegotiate the price of $54.20 per share offered by Musk.
Vijaya Gadde suggested that the ball is in Elon Musk’s court, since he must do everything possible to ensure that his financing is in order. The also responsible for policies and security confirmed the intention of the board of directors to enforce the terms of the agreement. Although she tried to be diplomatic on this issue, Gadde opened the door to a possible lawsuitalthough reaching that step would be quite rare.
Also present at the employee meeting were Twitter CEO Parag Agrawal and CFO Ned Segal. The latter touched on the sore point of the purchase and the possible reason why Elon Musk paused the operation. Although Twitter shares fell and the price is well below the offer, the company remains firm and does not consider renegotiating. Segal stated that they work with Elon Musk and his team on a regular basis.
Elon responds with a meme
After the news was released, Elon Musk was not silent and responded as best he knows how to do: with a meme. The CEO of Tesla charged against Twitter and the excess of bots on the platform, the alleged reason why the operation would have been paused.
The tycoon declared a few days ago that he would suspend the operation until he confirmed that the percentage of false accounts on Twitter is less than 5%. “The more questions I ask, the more my concerns grow,” he said at a technology event. Curiously, Elon Musk would have omitted to ask questions about the platform.
In a preliminary proxy statement sent by Twitter to the Securities and Exchange Commission (SEC), the company offers details of the operation. On page 63 of the document it reads:
Before entering into the merger agreement, Mr. Musk did not request to enter into a confidentiality agreement or search Twitter for any non-public information about Twitter.
If the deal doesn’t close, Twitter may sue Elon Musk
in recent days Elon Musk has been quite eloquent regarding how the percentage of bots is reason enough to stop their purchase intentions. Elon admitted that it could renegotiate the initial offer, something that Twitter is not willing to accept. At this morning’s meeting, the directors of the social network described Musk’s tweets as “noise” and assured that the operation continues without changes.
If Elon Musk regrets the purchase, he would face a bigger problem. Section 9.9 of the merger agreement includes a specific performance clause that allows Twitter to force Musk to consummate the deal. The tycoon could fight back by arguing that bots constitute a material adverse effectas they are higher than Twitter’s estimates.
Morgan Ricks, a Vanderbilt University law professor, mentioned The Guardian that the adverse effect clause is difficult to overcome in court. If Elon Musk and Twitter do not reach an agreement, it is very certain that the social network will sue him in a District Court.