Twitter opposed a third attempt by Elon Musk to cancel his agreement to buy the social network, a day before the company’s shareholders are to vote on the $44 billion deal.
Musk has recently raised questions about the number of bot accounts on the platform, as well as the company’s hiring-and-firing decisions, and has argued that violations of the buyout agreement should enable him to withdraw his offer. Twitter investors are nevertheless likely to accept Musk’s bid, and the Oct. 17 court case to decide whether he must go through with his offer remains on track.
The San Francisco-based company has renounced Musk’s claims over spam bots. The deal involved a provision that if it fell apart, the party breaking the agreement would pay a termination fee of $1 billion, under certain circumstances.
“The shareholder approval expected tomorrow formally sets the stage for the Game of Thrones Battle between Musk and Twitter in the Delaware Courts with the high possibility in our opinion that some form of negotiation likely takes place,” ahead of the October trial, Wedbush Securities analysts Daniel Ives and John Katsingris mentioned.
Musk agreed in April he wanted to own Twitter, but since then the stretch between Twitter’s stock and the $54.20 deal price has widened, signalling scepticism the transaction will go through. Meanwhile, the social network enforced a hiring freeze while it struggled to sell ads and the shares were pounded by a broader market downturn.
“Though this allegation is stronger than Musk’s earlier hiring-and-firing claims, only ‘material’ breaches let Musk walk away,” Matthew Schettenhelm, a Bloomberg Intelligence litigation analyst. “And we doubt a $7.75 million severance payment qualifies, even if Twitter can’t show it tracks its past practice.” he further added