It seemed too easy this week when Elon Musk, after months of dragging his heels on his $44 billion agreement to buy Twitter, abruptly reversed course and announced he would buy the company at the original asking price.
Perhaps there was reason to question the reversal.On Thursday, Musk’s lawyers filed a new brief with the Delaware Court of Chancery, unilaterally requesting that a judge halt their upcoming trial and insisting that Twitter “will not take yes for an answer” on the billionaire’s renewed offer.
Early evening, the judge agreed to postpone the proceedings until October 28, the date by which Musk’s team said they expected to close the transaction. If they fail to reach an agreement by then, the trial will likely begin in November.
The social media giant had resisted halting the proceedings until it was sure the transaction will actually go through—and that Musk's financing is fully secured. In recent days, some sources of Musk’s original funding have reportedly gotten cold feet, throwing a portion of the deal’s logistics into question.Dan Ives, an analyst at Wedbush Securities who has closely covered the litigation, said he still thought Musk was serious about the transaction, but the parties are playing “high stakes poker” in an effort to carve out favorable terms—and that neither side trusts the other.
Twitter wants “more assurances that this [deal] is going to get done regardless of the debt financing, because now they have the upper hand,” he added. The company, Ives thinks, will push Musk to drop the stipulation about obtaining debt financing. Alternatively, it may insist the billionaire “make a significant cash deposit for Twitter to make sure that he means business and there’s nothing more sinister” at play.
Representatives for Twitter did not immediately respond to The Daily Beast’s request for comment, but in its own counter-filing on Thursday, the company rejected the argument that it was “unwilling to take yes for an answer.”
Instead, its filing said, Musk’s new proposal was simply an “invitation to further mischief and delay,” because staying the trial would eliminate the time pressure placed on him to close the deal.
“They refuse to commit to any closing date,” the filing said, “all the while remaining free to change their minds again or to invent new grounds to avoid the contract.”
It further claimed that Musk had failed to prove his commitment to securing financing. On Thursday, the filing continued, a representative for one of Musk’s potential lenders testified that Musk had not sent the lender “a borrowing notice and [had] not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline.”
Twitter has endured months of instability at Musk’s behest. Last spring, he agreed to buy the business, then changed his mind and began waging war over the amount of spam and fake accounts on the platform.
As the dispute headed to court, experts questioned whether Musk’s excuses for backing out would hold up. The billionaire seemingly tried to sidestep that risk with his latest offer, but it remains to be seen whether he will follow through.
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