October 7, 2022


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Twitter shareholders prepare to agree to takeover Elon Musk

Twitter shareholders prepare to agree to takeover Elon Musk

Twitter a company

TWTR -1.85%

Ready to approve the shareholders Acquisition of $44 billion That Elon Musk is now trying to get out, according to people familiar with the matter, and lay out the fate of the deal In the hands of a Delaware judge The social media company is trying to force the billionaire to follow through with the purchase in court.

People said early votes show investors approved the deal by a large margin, although there is always a chance for the results to change as shareholders can change their vote through the meeting scheduled for Tuesday at 1 p.m. ET.

Some people said that Mr Musk, the company’s largest shareholder with a stake of approximately 10%, had somehow not voted on his shares as of Monday afternoon, and is unlikely to claim that Twitter violated the merger agreement. . The agreement requires Mr. Musk to vote his shares in favor of the deal, although his support is not critical if enough other investors are backing him.

Some people said that other major shareholders of Twitter, including index fund managers who together control roughly 20% of Twitter shares, are willing to back the deal.

Mr. Musk agreed in April to pay $54.20 per share on Twitter. The social media company’s shares have traded for much less since he tweeted in May The deal was “pending”, Introduction to it later move out of it. This means that many shareholders will realize significant gains if the deal is closed on its original terms. The stock closed Monday at $41.41.

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Analysts expect Twitter shares to drop significantly if Mr. Musk finds a way to get away without paying hefty fees.

In July, Mr. Musk revealed a plan to salvage the deal over allegations that Twitter misrepresented the number of spam accounts on its platform. Twitter afterwards File a lawsuit against him to continue, arguing that Mr. Musk has changed his mind as the market jitters and is still obligated to complete the deal. The two sides are scheduled to face off in a Delaware court in Chancery Starting October 17.

While the legal experts have yet tends to display Twitter’s case is stronger, there are still important questions. They include whether a recent whistleblower complaint about Twitter could advance Mr. Musk’s case and whether a judge would force a reluctant buyer to pursue such a big deal, especially for a company with Twitter’s importance to society. The so-called specific performance remedy that Twitter is searching for has not been tested on this scale.

Twitter’s former head of security, Peter Zatko, has submitted a file whistleblower complaint against the company in July, claiming it failed to protect sensitive user data and lied about its security issues. Twitter said his complaint was “full of inconsistencies, inaccuracies, and lacking important context.”

Mr. Musk got permission last week To consolidate the allegations of the whistleblower In the lawsuit against him he filed an amended complaint and is now sealed.

Mr. Zatko is scheduled to testify before a US Senate committee about his concerns on Tuesday, the same day Twitter shareholders will finish casting votes on the deal.

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write to Cara Lombardo at [email protected]

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It appeared on the September 13, 2022, print edition as “Twitter Deal Set to Win Vote.”