Crime & Justice

Twitter accepts Musk’s $44 bn buy offer, shares jump 22 pct.

New York, Oct 4 (EFE).- Twitter on Tuesday said that it had accepted Tesla CEO Elon Musk’s offer to buy the social network for $44 billion, as the two parties had agreed in April, although initially that deal fell through after Musk tried to back out and Twitter responded by suing him.

“We received the letter from the Musk parties which they have filed with the (US Securities and Exchange Commission),” said the firm in a statement on Tuesday, adding “The intention of the Company is to close the transaction at $54.20 per share.”

Twitter and Musk – who is the world’s richest man and has more than 100 million followers on Twitter – had agreed that he would buy the company for $44 billion but later the Tesla mogul said he was withdrawing from the transaction.

Musk claimed at the time that Twitter had failed to properly count the number of fake accounts on the platform, and social network then sued after Musk said he was backing out of the deal.

In recent months, Musk has claimed that Twitter was failing to rise to its potential as a platform for free speech.

The letter from Musk’s lawyer dated Monday and disclosed by Twitter in the securities filing said Musk would finalize the merger, provided that the Delaware Court of Chancery “enter an immediate stay” of Twitter’s lawsuit against him and adjourn the pending trial, which had been scheduled to get under way on Oct. 17.

Now, by agreeing to the original deal, Musk has basically given Twitter what it had been seeking in court, namely “specific performance” of the contract, meaning that the mogul has agreed to complete the purchase at the original price.

Legal experts have said that Musk was likely to lose the Twitter lawsuit, filed in July, and in that circumstance the court could have imposed interest payments on him that would have increased his costs.

Musk’s letter does not give a specific date for the consummation of the agreement, although Twitter shareholders – amid the media soap opera, the legal brouhaha and a volatile economic climate – gave the green light to the sale on Sept. 13.

Trading in Twitter stock on Wall Street had been halted for much of the day pending further information about the deal, but it resumed trading late on Tuesday and skyrocketed 22.24 percent to close at $52 per share.

Meanwhile, shares of Tesla rose 2.9 percent to close at $249.22 per share, although that was substantially below where shares of the electronic vehicle firm had been trading at mid-session, when they were priced at $256.29.



Related Articles

Back to top button