Judge delays Twitter trial to give Musk time to seal buyout
7 October 2022, 00:44
Elon Musk and Twitter have until October 28 to close the deal.
A judge has delayed a looming trial between Twitter and Elon Musk, giving the Tesla CEO more time to close his 44 billion dollar (£39 billion) deal to buy the company after months spent fighting to get out of it.
Mr Musk had asked to halt the upcoming Delaware court trial, where the Tesla billionaire was expected to fare poorly against Twitter’s lawsuit to force him to complete his April merger agreement.
Mr Musk revived the takeover offer on Monday but said he needed time to get the financing in order.
Chancellor Kathaleen St Jude McCormick, head of the Delaware Chancery Court, said on Thursday that Mr Musk and Twitter now have until October 28 to close the deal. A trial originally set for October 17 will happen in November if they do not, she said.
Twitter had asked Chancellor McCormick earlier on Thursday to proceed with the trial, saying the billionaire refuses to accept the “contractual obligations” of his April agreement to buy the social media company and take it private.
Twitter disputed Mr Musk’s claim that the San Francisco-based company is refusing to accept his renewed bid. Mr Musk told Twitter earlier this week he is ready to buy the company once again after trying to back out of the deal over the summer, accusing it of refusing to give him information about “spam bot” accounts on the service.
Twitter described Mr Musk’s move to delay the trial as “an invitation to further mischief and delay” after his arguments for terminating the agreement have not had merit.
But after the judge’s ruling, Twitter reiterated in a statement that it was ready to close the deal on the share price agreed upon in April: “We look forward to closing the transaction at 54.20 dollars by October 28th,” referring to the price Mr Musk originally offered for each Twitter share.
Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow “wiggle room for Musk to walk away again”.
Musk lawyers argued that Twitter was disagreeing with the trial delay “based on the theoretical possibility” of Mr Musk not coming up with the financing, which they called “baseless speculation”.
They said Mr Musk’s financial backers “have indicated that they are prepared to honour their commitments” and are working to close the deal by October 28.
Musk lawyer Alex Spiro said in a statement on Thursday that “Twitter offered Mr Musk billions off the transaction price” but Mr Musk “refused because Twitter attempted to put certain self-serving conditions on the deal”.
He did not elaborate on what those conditions were. Twitter has not described the talks beyond what its lawyers have said in court.
Twitter’s shares fell 1.91 dollars, or 3.7%, to close at 49.39 dollars on Thursday. It was the stock’s second day of declines following a surge of more than 22% on Tuesday after Mr Musk made his renewed offer to buy the company.
