Twitter shareholders approve Musk’s $44bn takeover bid
Image credit: reuters
The vast majority of Twitter shareholders voted on Tuesday in favour of Elon Musk’s purchase of the company, despite the billionaire's wish to walk away from the transaction.
Twitter is moving forward to attempt to force Elon Musk to uphold his agreement to buy the social media company, as its shareholders vote to approve the buyout.
The billionaire made an offer last April to purchase Twitter for $44bn (£35bn). However, he later backed down from the deal, stating that the acquisition could not go forward until the company provided information about how many accounts on the platform are spam or bots.
The vote, made in a short conference call with investors from the company's San Francisco headquarters, could have spelt the end of Twitter's legal pursuit. However, the shareholders' decision has given the company the green light to try to force Musk to buy the company in the courts, a process that began on 12 July, when Twitter sued Musk in Delaware.
The trial is scheduled to take place next month.
“Twitter stands ready and willing to complete the merger with affiliates of Mr. Musk immediately, and in any event, no later than on September 15, 2022, the second business day following the satisfaction of all conditions precedent, which is the timeline required by the merger agreement,” the company said in a statement.
A preliminary count indicated that 98.6 per cent of the votes cast were in favour of the deal, according to Twitter.
The vote came days after Musk’s third letter to Twitter seeking to terminate their deal. The billionaire has countersued Twitter, accusing the company of committing fraud, breach of contract and violation of a securities law in Texas, where he now lives. He claims that Twitter held back critical information and misled his team about the size of its user base.
Musk's last letter was pegged to a purported $7.75m severance payment the company made to its former head of security, Peiter Zatko, who has recently testified before the Senate Judiciary Committee about Twitter's alleged security flaws.
“They don’t know what data they have, where it lives and where it came from and so, unsurprisingly, they can’t protect it,” Zatko told the lawmakers. “It doesn’t matter who has keys if there are no locks.”
Zatko also directly referred to questions asked by Musk about bot accounts, saying Twitter’s tools and teams for finding such accounts are insufficient.
In the letter, Musk’s lawyers claimed the payment violated a provision of the acquisition contract, in which Twitter agreed not to provide any severance payments to employees in amounts outside “the ordinary course of business consistent with past practice,” according to the contract.
In response, Twitter slammed Musk's demands as “invalid and wrongful” and said Zatko's testimony is “a false narrative … riddled with inconsistencies and inaccuracies” and lacked important context. The company said Zatko's firing was prompted by “ineffective leadership and poor performance”, and that his allegations appeared designed to harm the company.
“Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” Twitter’s lawsuit reads.
Twitter is currently valued at $32bn, considerably below Musk's $44bn offer. The company’s stock opened Tuesday at just under $41 per share, nearly 25 per cent below the deal price.
Last month, Musk sold nearly $7bn-worth (£5.8bn) of shares in Tesla to prepare for his court battle with Twitter and the possibility that he would be forced to buy the company.
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