Twitter has agreed to delay a deposition by Elon Musk scheduled for Thursday as the sides hash out a way to close the Tesla chief executive’s $44 billion (€44 billion) buyout of the social network, according to two sources familiar with the matter.
Mr Musk had originally said he would buy the company in April before attempting to back out of the deal, citing concerns over fake accounts and sparking a bitter and closely watched corporate legal battle.
Earlier this week Mr Musk sent a letter informing Twitter that he was willing to close the deal at the originally agreed price of $54.20 per share in exchange for halting the litigation to determine if he can walk away from the deal. The trial is set to begin on October 17th in a Delaware court.
Mr Musk was scheduled to appear at 9.30am on Thursday at the offices of Wilson Sonsini Goodrich & Rosati in Austin, Texas, where Tesla is headquartered, according to court papers. He was set to be deposed for two days by Twitter’s lead litigation attorney, Bill Savitt of Wachtell, Lipton.
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Mr Musk had cancelled a previously scheduled deposition over concerns about Covid-19 exposure, according to a letter filed with the court this week by Twitter’s lawyers.
The latest delay comes as Twitter is seeking precise contractual protections from the court to guarantee that Mr Musk would close the deal given the already fraught relationship between the sides.
Mr Musk and Twitter previously held talks about potential price cuts to the deal; however these were unsuccessful, according to a person familiar with the matter. The Wall Street Journal first reported the discussions.
The negotiations over how to ensure the deal closes have snagged on concerns that Mr Musk could still have wriggle room to sabotage the $13 billion of debt financing he has arranged. According to one person in the Twitter camp, there remains far less concern about the banks themselves being reluctant to meet their debt commitment contract.
Twitter pushed back after Mr Musk seemed to try to add a new contingency to the deal, which was not in the original merger agreement, that he would close on the condition that the debt financing was received, according to a person familiar with the matter.
An agreement would put an end to weeks of legal wrangling, including a brutal discovery process in which a trove of text messages between Mr Musk and Silicon Valley associates became public. Each side has accused the other of being uncooperative and deliberately hiding information.
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On Wednesday, the judge overseeing the case in Delaware Court of Chancery, Kathaleen McCormick, wrote: “The parties have not filed a stipulation to stay this action, nor has any party moved for a stay. I, therefore, continue to press on toward our trial set to begin on October 17.”
Representatives for Mr Musk did not immediately respond to a request for comment. Twitter declined to comment.
Legal analysts have suggested that Mr Musk’s about-face was an acknowledgment of the weaknesses of his case in which, after waiving due diligence, he alleged that Twitter had misled regulators and investors by grossly underestimating the number of fake accounts on its platform.
He also accused the company of failing to disclose cyber security failures, an issue later added to the complaint following similar allegations by a former Twitter executive-turned-whistleblower.
Twitter denied the allegations and said it was Mr Musk who had breached his obligations in the merger agreement, including by repeatedly disparaging the company and its executives as well as failing to move to complete the deal. — Copyright The Financial Times Limited 2022
