When you think Elon Musk’s battle for Free Speech is over after Twitter agreed on Monday to accept the deal, well, there’s still a possibility that the deal won’t happen.
The filing from the Securities and Exchange Commission (SEC) revealed the deal agreement that Musk agreed to pay a $1 billion termination fee if he abandons the acquisition.
At the same time, the social media platform would be required to pay the same amount if the company chooses to accept a better offer. A former investment banker, who requested anonymity, said the clause is a standard practice in merger agreements.
He said in a statement:
“The board has to act as fiduciary, so if a higher price comes, they need to consider it.”
“But if a higher price does come, Musk can always up his offer. Practically speaking though, there are no other potential buyers right now.”
Conservative Brief noted in their report that if the deal is not finalized on or before October 24, 2022, the SEC filing stipulates that Twitter “may terminate the Merger Agreement.” Additionally, it could also fail if Twitter stockholders “fail to adopt the Merger Agreement.”
The outlet added that this could only happen under “limited circumstances,” including if a third party other than Musk decides to offer “a competing acquisition proposal that constitutes a Superior Proposal.” There are also some stipulations that are in Musk’s favor, such as Twitter is prevented from soliciting any additional offers.
Musk suggests in his recent tweet that he’s willing to toe this line to get the deal finalized.
“By ‘free speech’, I simply mean that which matches the law. I am against censorship that goes far beyond the law.”
By “free speech”, I simply mean that which matches the law.
I am against censorship that goes far beyond the law.
If people want less free speech, they will ask government to pass laws to that effect.
Therefore, going beyond the law is contrary to the will of the people.
— Elon Musk (@elonmusk) April 26, 2022
Here’s what The Epoch Times reported about the issue:
The lawyer, who wished to remain anonymous, said the board’s ability to exit the deal is “significantly limited” despite this “fiduciary out” provision.
“To be clear, they can only engage with third-party offers that are superior to Elon Musk’s or that the board believes could lead to a superior transaction,” he said.
Twitter is subject to “no-shop” restrictions, according to the agreement.
“That’s a provision that prohibits the board and its representatives from going out and soliciting bids now that they have a deal with Elon Musk. They can’t go and shop around Twitter anymore.”
Any offer that comes in after the stockholders approve the deal is ineligible for consideration by the board. Furthermore, the board of directors can’t approve the third-party proposal without first giving Musk up to four business days to respond, the lawyer said.
Sources: Conservativebrief, Epoch Times
Sorry losers, the deal has happened, Elon Musk is in, and the anti free speech Ass holes are out. Time for America to bounce back