With Musk wavering on his commitment to buy the company for $44 billion, the board of directors decided to enforce the merger agreement at the original price.
The Board and Mr. Musk agreed to a transaction. The agreement is in the best interest of all shareholders. The board said in a statement that they intend to close the transaction and enforce the merger agreement. The preliminary proxy statement was released on Tuesday.
The company said in a press release that it was committed to completing the transaction as quickly as possible.
Under certain circumstances, the sale agreement allows either Musk or Twitter to kill the deal and pay a $1 billion breakup fee. If Musk fails to complete the Merger as required, he will have to pay the termination fee.
Musk can not necessarily get out of it based on his complaints about the number of accounts on the social network. According to the filing, the merger agreement includes a performance provision that allows Twitter to force Musk to complete the deal. Should the deal end up in court, it's possible that a judge will order Musk to complete the merger rather than giving him monetary compensation for violating it.
AdvertisementThe merger deal has that provision in it. If the Equity Investor is able to fund the Equity Financing, then it will be entitled to specific performance or other equitable remedy.
If either party fails to take required actions, there would be irreparable damage for which monetary damages, even if available, would not be an adequate remedy.
The deal has a non-disparagement clause that says Musk can use his platform to promote the merger, but he has criticized the company and its representatives since signing the deal.
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