The pressure is now high for Tesla CEO, Elon Musk and his lawyers. This long lasted battle with Twitter about the purchase of the microblogging site seems to be coming to an end on Friday.
The court overseeing the Twitter case had set October 28 as the deadline for finalizing the buyout. This deadline was set as part of Twitter’s lawsuit to force the deal through.
It appears that this tension must have hit the billionaire mogul so hard that he had to meet up with his bankers. on Monday, according to Forbes, citing Bloomberg.
This was to craft a plan on how to close the deal. Morgan Stanley, Bank of America, and Barclays are some of the banks involved in debt financing for the deal, which is to be finalized by Thursday.
We reported that Musk told the banks that agreed to help fund the acquisition that he could eliminate executive and board pay to slash costs and would develop new ways to monetise tweets. Recall that Musk had tweeted about eliminating the salaries of Twitter’s board directors, which he said could result in about $3 million in cost savings.
He also told the banks he also plans to develop features to grow business revenue, including new ways to make money out of tweets that contain important information or go viral, reports say.
Why was the Twitter buyout deal delayed?
Recall that Elon Musk had stated he wanted to acquire the microblogging site for $44 billion in April. His original financing package included $21 billion in cash, $12.5 billion of margin loans secured against his 16% stake in Tesla, and $13 billion in loans from several banks.
Even though the deal is still at the original price of 54.20% per share, securing funding for the deal might have been one of the many reasons for the delay.
However, it appears that things are beginning to regroup now as more hands are even willing to help the billionaire close his deal. For instance, Mirae Asset Financial Group, based in South Korea, has also announced they are open to supporting the billionaire.
Another reason was the assertions Elon Musk made following a supposed “realization”. According to him, Twitter had been underreporting the number of bots by a significant margin. In response, the mogul pulled out of negotiations.
At that time, the Tesla CEO was already the largest shareholder in Twitter at the time with a 9.2% share in the company. He, however, held off on purchasing the entire business until Twitter provided accurate numbers and provided evidence that less than 5% of its user accounts were false.
In retaliation, the Twitter board filed a lawsuit against the billionaire, accusing him of adopting a hypocritical plan to cancel the purchase.
This dragged on the acquisition deal for quite a while.
What will happen after Friday for Twitter and Elon Musk?
If the two parties are unable to come to an agreement by Friday, litigation will resume, a trial date will be set, and the legal dispute will get worse. Elon Musk’s firm’s stock prices may be impacted, and according to Insider, the billionaire may also suffer public humiliation.
However, if Musk eventually executes the agreement this week, that does not automatically mean the saga is over. Bloomberg claims that US president Joe Biden is considering reviewing the deal’s security, although, the White House has refuted these claims.
Finally, the acquisition will usher in a brand-new era for Twitter. According to The Washington Post, Musk intends to lay off around 75% of the company’s workforce. That possibility is already creating fears in some quarters.
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