Elon Musk is like sitting on a fire: Only 20 days to take care of $ 44 billion to buy back Twitter or he will have to go to court

Tram Ho

Elon Musk must deliver $ 44 billion to buy back Twitter by 5 pm on October 28, 2022 or he will have to go to court.

Elon Musk như đang ngồi trên đống lửa: Chỉ có 20 ngày để lo 44 tỷ USD mua lại Twitter nếu không sẽ phải hầu tòa - Ảnh 1.

The judge overseeing the acquisition dispute between Elon Musk and Twitter on Thursday ruled to suspend legal proceedings until October 28 at the request of Tesla CEO Elon Musk. This means that the trial scheduled to begin on October 17 will not go as planned.

“If the transaction is not closed by 5:00 p.m. on October 28, 2022, the parties will be instructed to contact me by email that evening for a hearing date for the dispute in court in November 2022.” , Judge Kathaleen St. McCormick of the Court of Delaware said in the announcement.

Elon Musk’s lawyers on Thursday filed a motion to drop legal proceedings in the dispute with Twitter and cancel the trial date that had been set to begin on October 17. They note that “changing circumstances have effectively prompted this action”.

The information in the application said that the remaining time is “waiting for the closing of the transaction” – which comes after Musk earlier this week proposed to proceed with the $44 billion acquisition of Twitter on agreed terms. initial deal after months of trying to get out of the deal.

The filing states that Musk is “ready to close the transaction at $54.20 per share, with lenders working to close the deal on or around October 28.”

But Twitter also has a move to prevent the cancellation of legal proceedings. “Twitter will not give a yes. What is surprising is that they (Elon Musk’s side) have previously insisted on proceeding with this lawsuit,” according to the letter.

Twitter’s lawyers have issued a harsh response to Musk’s filing. “The obstacle to ending this litigation, as Defendant says, is not Twitter’s unwillingness to agree to an answer,” the letter read. “The obstacle is that the Respondent still refuses to accept their contractual obligations.”

In fact, for the past several months, Musk has been trying to get out of the deal and “now, before the trial, Musk’s side declares that they intend to close the deal as it was.”

The back-and-forth offers the clearest indication yet that Musk’s financial resources may now be at the heart of the legal pause and closing of the deal. Musk has previously said that he would pay for the acquisition through a mixture of debt commitments from financial institutions, equity financing from investors and with his own assets.

But legal experts have raised concerns that the parties that once committed to the loan may now want to pull out of the deal due to recent changes to the debt market and the decline in the value of media companies. society. Twitter, according to experts, will likely want to maintain the litigation as a pressure on Musk unless he agrees to close the deal with or without the debt.

In short, the question many skeptics now have is: Does Musk really have enough money to buy Twitter right now?

Even the richest man in the world needs financial help because the size of the deal is so large. In April, Musk announced that he had raised $46.5 billion for the deal, which included two letters of commitment for loans from Morgan Stanley and other unnamed financial institutions (one $13 billion and $13 billion). one is 12.5 billion USD, then reduced to 6.25 billion USD). Musk himself also pledged around $21 billion out of pocket to fund the deal and later raised another $7 billion from private investors like Oracle founder Larry Ellison and cryptocurrency exchange Binance.

Ann Lipton, an associate professor of business law at Tulane Law School, said Musk was likely trying to help Morgan Stanley market the debt to other investors before asking them to give him money to close the deal. While Musk isn’t obligated to do so, it would help a bank he has had a relationship with for more than a decade, given the tougher economic environment at the time of the deal. agreement for the first time.

Some have speculated about whether Morgan Stanley and other banks that promised Musk loans might try to back out of the deal now as Twitter is said to be even less valuable than it was when the deal was announced. agreement is made for the first time. However, the answer to this remains a mystery.

Plus, taking out the debt issue aside, Musk may still need a little more cash to finance the portion of the money he’s committed to out-of-pocket for the deal. To raise money, Musk may have to sell off Tesla shares, and he needs a few days to do so. Tesla was scheduled to report quarterly results on October 19, and executives are often asked not to sell shares in the days leading up to the earnings call.

The twist in the deal was that in a response, Twitter’s lawyers said Musk’s team had declined to “commit to any specific closing date.” The company added that a representative of one of the banks set up to lend to Musk on Thursday morning testified that “Musk has not yet sent them a loan notice nor informed them that he He intends to make the deal to buy Twitter as original, let alone any specific timeline.”

Currently, Twitter is very impatient and they say: “Musk side should arrange to close the deal on Monday, October 10.”

Source: CNN

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