if $44 billion deal between Elon Musk and Twitter If it disperses, both parties may have to pay the other $1 billion. a securities filing on Tuesday.
The world’s richest man struck a deal on Monday to buy the social media company for $54.20 per share. Mr. Musk, who also leads electric car maker Tesla and rocket maker SpaceX, said he plans to make Twitter private and want to improve the product and encourage free speech on the platform.
Twitter told its employees on Monday that the deal would not close for another three to six months. According to Tuesday’s filing, Twitter will in some cases have to pay Mr Musk if the deal goes wrong. This includes whether the social media company has signed a deal with another suitor whose offer it considers superior. Mr Musk will have to pay on his behalf if the deal’s financing goes bad.
Twitter declined to comment. Mr Musk did not immediately respond to a request for comment.
Mr. Musk’s financing played a key role in the machinations of the deal. Initially, it didn’t seem like he had set aside any funds for his proposal. But last week, he announced that he had loan commitments from various banks in a file. Paying with Mr. Musk 13 billion dollars on bank loans, plus other $12.5 billion On loans against his stake in Tesla. promised to someone else 21 billion dollars in cash, but he did not specify the source of the money.
Lawyers said it’s not unusual for the buyer to be asked to accept a fee should the funding disperse. The fee Mr. Musk has – roughly 2.5 percent of the deal – is on par with other acquisitions.
“It’s actually a pretty plain vanilla merger deal,” said Steven Davidoff Solomon, a professor at the University of California, Berkeley School of Law.
The dossier also stated that if a deal is not closed by October 24, either side could withdraw. If the transaction was pending regulatory approval at the time, Mr. Musk and Twitter would have had another six months to close the transaction.
US regulators may review Mr Musk’s acquisition of Twitter, but It is unlikely that he will sue to preventFormer antitrust officials said there was no example of a company buying a competitor.
European officials said on Tuesday Twitter owned by Mr. Musk Digital Services Act. The landmark law, likely to go into effect next year, requires social media companies to more aggressively moderate their platforms to combat misinformation and restrict certain online ads.
Mike Isaac contributing reporting.