Submitted proxy statement shows billionaire rushing to close deal, contrary to current stance
Submitted proxy statement shows billionaire rushing to close deal, contrary to current stance
Twitter Inc. on Tuesday released its report on the deal negotiations with Elon Musk, showing that it chose not to ask the questions about the social media company’s business, which it now quoted as explaining that the $44 billion acquisition is “on hold.”
The report, published in Twitter’s proxy statement, which outlines what shareholders need to know to vote on the deal, paints a picture of Mr. Musk in a hurry to close a deal and makes no mention of who Threats he tweeted that he would not go ahead with the deal unless he gets to the bottom of how many spam accounts the platform has.
Mr Musk negotiated the Twitter deal over the weekend of April 23-24 without conducting due diligence, the proxy statement shows.
Since inking the deal on April 25, Musk has questioned the accuracy of Twitter’s public filing about spam accounts, which make up less than 5% of its user base, claiming that it needs to be at least 20%. This is despite Twitter’s statement that its submissions are only estimates.
Mr Musk tweeted Tuesday that Twitter CEO Parag Agrawal has refused to provide evidence of his company’s valuation and that the deal cannot move forward until he does. Twitter’s proxy statement shows that Mr Musk made no effort to obtain information on the matter in the run-up to the deal.
“Mr. Musk has not asked to enter into a non-disclosure agreement or to request any non-public information about Twitter from Twitter,” Twitter said in its proxy statement.
Legal experts have said Mr Musk would likely lose in court if he tried to walk away from a deal. But they say any litigation would likely be lengthy and create uncertainty about Twitter’s business. Most of the companies that prevailed against their acquirers in court ended up negotiating financial settlements.
Mr. Musk is contractually obligated to pay a $1 billion termination fee if he doesn’t close the deal, but Twitter can sue for “certain performance” to force Mr. Musk to close a deal and, as a result, a settlement to get from him.
Twitter said on Tuesday it remains committed to the deal at the agreed price and expects it to close in 2022.
