Twitter takeover: US Court halts trial, urges Tesla CEO Elon Musk to close deal by October 28
The court case was put on hold until October 28 at 5 p.m. EDT so that Musk, the CEO of electric car maker Tesla Inc., could finance the transaction. Judge Kathaleen McCormick instructed the parties to get in touch with her to set up a November trial if the deal did not conclude by her deadline.
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FollowA Delaware judge suspended Twitter Inc.'s legal efforts against Elon Musk on the eve of trial, according to a court document released on Thursday, to allow the businessman time to finance his $44 billion takeover of the social media platform. The court hearing was postponed until October 28 at 5 p.m. EDT so that Musk, CEO of Tesla Inc., could fund the deal.
Judge Kathaleen McCormick directed the parties to contact her in order to schedule a November trial if the agreement was not completed by her deadline. Musk's deposition on Thursday was postponed by mutual agreement because his trial was scheduled to begin on October 17.
Investors seemed reassured that the order will put an end to many days of uncertainty regarding the deal's status. Twitter shares rose 2.7% in after-hours trading after falling 3.7% at the conclusion of the day. The world's richest billionaire indicated this week that he will acquire Twitter for the $54.20 per share agreed upon in April, subject to loan financing.
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That was a watershed moment for Musk, who had been battling Twitter in court for months in an attempt to get out of the deal. He claimed, among other things, that Twitter had deceived him about the amount of people who actually use the platform.
Musk stated in a court declaration filed on Thursday that, while banks were collaborating to finance the transaction, he still required more time. Musk stated that a minor delay was preferable to the months required for a trial and appeal.
Twitter argued in a court statement that the judge should reject the concept and that Musk's plan was "an invitation to additional mischief and delay," indicating a lack of trust between the parties.
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Musk, according to Twitter, will have to shut down within the next week. On Thursday, a corporate representative for a lending bank purportedly stated in court that Musk has yet to send them a borrowing notice and has not made it apparent that he intends to close.
As the rapid pace of interest rate hikes has ratcheted up market volatility and decreased the desire for leveraged financing, major banks that pledged to fund $12.5 billion, or approximately 28 per cent of the deal, might be facing large losses.
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