Elon Musk "Terminates" Merger

On Friday afternoon, Elon Musk and his team of lawyers officially called off his planned takeover of Twitter.

While he was mingling with other billionaires at the Sun Valley Conference, Elon Musk made an official filing with the SEC in which he listed his reasons for pulling out of the deal.

The main reason? Musk reportedly can't determine how many of Twitter's users as "spam accounts", and he contends that Twitter isn't being forthcoming with the information.

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Twitter, on the other hand, contends that they have an ironclad deal with Musk for $44 billion.

The result? The two sides are set to clash in court, with Twitter claiming that they will be filing a lawsuit over the next week, seeking to enforce the merger.

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So what happens now? Elon pays a $1 billion breakup fee and walks away?

It's not that simple at all, as Twitter is going to seek to enforce a specific performance provision, meaning that they will look to force Elon to complete the deal.

Twitter will claim that Elon has to follow through on the deal as he agreed to waive due diligence.

Elon has already claimed that Twitter was in material breach of the terms of the deal and that he shouldn't be forced to follow through.

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So what happens next?

The odds of a pre-trial settlement between the two sides seems low, which means that the fate of the merger will be placed into the hands of the judge that hears the case.

Elon Musk is going to have a very hard time walking away from this deal.

The likeliest outcome? The two sides agree to a revised deal at a lower price.

A certain outcome? The lawyers for the two sides are going to make some of the biggest paydays of their lives.

Filed under: General Knowledge