Twitter to pay Elon Musk $1 bn if THIS happens
Twitter Inc. will be required to pay a termination fee of $1 billion under certain circumstances if it ends an agreement to be acquired by Elon Musk for $44 billion, according to a filing on Tuesday. Musk will also be subjected to the same fee if he ends the deal.
The fee would have to be paid if Musk isn’t able to deliver the funding for the acquisition as promised, for example, or if Twitter were to accept a competing acquisition proposal or recommend shareholders vote against Musk’s offer, according to a filing with the U.S. Securities and Exchange Commission.
The billionaire entrepreneur is taking the 16-year-old company private for $54.20 a share in one of the biggest leveraged buyout deals in history. He has lined up financing that includes $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including margin loans backed by his equity stake in Tesla Inc., and $21 billion in equity financing to be provided by Musk himself.
The SEC filing also includes details about changes to Twitter’s employee equity program given that the company will be private once the deal is completed. Employee stock grants will continue to vest until the deal closes, according to the filing, but any unvested stock awards will be canceled, and employees will instead have the option to be paid out in cash when those awards would have vested.
Musk’s offer price is 38% more than the stock’s close on April 1, the last business day before he disclosed a significant stake in the company, sparking a share rally. Twitter was initially skeptical that Musk would be able to line up financing for the acquisition and adopted a poison pill tactic to slow down his advance. As recently as last week there was little clarity on
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