Twitter: Elon Musk agrees to original acquisition agreement
Legal correspondent Alexis Keenan recaps the timeline of Elon Musk's initial acquisition deal to Twitter, the months of litigation, and the Tesla CEO's ultimate agreement to the original terms.
Video Transcript
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RACHELLE AKUFFO: After months of hemming and hawing and colorful emojis, Tesla CEO Elon Musk says he will purchase social media site Twitter at the original agreed-upon terms of $44 billion or $54.20 a share. But what does this mean for the upcoming trial in Delaware's chancery court later this month? Well, for more, we're joined by Yahoo! Finance's Alexis Keenan. Alexis, the clock is ticking right now.
ALEXIS KEENAN: The clock is ticking, but the clock is on pause. What's happening with the litigation is that Elon Musk has asked Twitter to stay the litigation, put it on pause, so that he can get a chance to prove he's going to close on this deal at that $44 billion. Now, this contingency that Musk is proposing for this day, it says that he will pay that original full price that was in the merger agreement.
But it is contingent upon the receipt by Musk of his debt financing so that is one caveat that could be a little bit of a snag here. Though, he has already contributed and agreed to $33 billion in equity.
The $12.5 billion in debt coming from Morgan Stanley, primarily, as of April, the way that shakes down, you can see there. $6.5 billion is supposed to be a leveraged loan. $3 billion of that secured bonds. And also another $3 billion in unsecured bonds, which of course, at this point, with the change in market conditions could be a hard sell to institutional investors.
And ultimately, though, Rachelle, in order to walk from this deal-- not looking like that will be the case right now. Although, it is Elon Musk and perhaps we should expect that there could be some changes but yet. So the judge is keeping the trial on the schedule for October the 17, and is not yet signing off. Musk will have to prove that this settlement offer is in fact good to go.
It looked like he perhaps during discovery was not going to be able to have that smoking gun that he would have really needed to prove fraud. Another contingency is that, in theory, the banks could come in and say, well, there was a material adverse event. But it's not looking like that is something that is going to happen at this point. Back to you, Rachelle.
RACHELLE AKUFFO: I'll be watching this space, indeed. Alexis Keenan, thanks so much.
