Twitter says waiting period for Elon Musk deal under antitrust act has ended

The $44bn proposal remains subject to approval by other regulators and the social media platform's stockholders

In April, Twitter entered a definitive agreement to be acquired by an entity wholly owned by Elon Musk for $44 billion. Reuters
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The waiting period under a US antitrust act for billionaire businessman Elon Musk’s $44 billion proposal to acquire Twitter has ended, with the deal now subject to other regulatory approvals.

The expiry of the waiting period of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) occurred at 11.59pm Eastern daylight time on Thursday, which was a condition to the closing of the pending transaction, the San Francisco-based company said in a statement to the Nasdaq on Friday.

“Completion of the transaction is subject to the satisfaction of the remaining customary closing conditions, including approval by Twitter stockholders and the receipt of remaining applicable regulatory approvals,” the statement said.

The HSR Act aims to provide the Federal Trade Commission and the US Department of Justice with information about large mergers and acquisitions before they happen.

In April, Twitter entered a definitive agreement to be acquired by an entity wholly owned by Mr Musk for $54.20 a share in cash for a total of $44bn.

The microblogging site's share price is down about 6 per cent since the start of this year.

It was trading at $40.25 a share, up almost 1 per cent, at 6.50pm UAE time on Friday.

While the deal to buy Twitter is supposed to be finalised by the end of this year, Mr Musk said last month it had been temporarily put on hold pending details on the number of fake accounts on the social media platform.

The chief executive of world’s biggest electric vehicle maker, Tesla, entered into a public spat with Twitter chief executive Parag Agrawal over the company's estimates of spam accounts and said the deal could not move forward unless the company provided proof that less than 5 per cent of its users were fake.

In a regulatory filing, Twitter said false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter.

A recent study by Israeli cybersecurity company Cheq said Twitter bots amount to up to 12 per cent of visits on the social media platform. It analysed 5.21 million website visits originating from Twitter, using more than 2,000 cybersecurity tests to determine each user's authenticity.

The US Securities and Exchange Commissionhas also asked Mr Musk to explain delays in filings related to the deal.

In one of its previous communications to Mr Musk, the regulator asked him to explain why he did not disclose, within a stipulated time period, his increased stake in Twitter, especially if he planned to purchase the company.

“Your response should address, among other things, your recent public statements on the Twitter platform regarding Twitter, including statements questioning whether Twitter rigorously adheres to free speech principles,” the regulator said in an earlier letter.

If Mr Musk decides to abandon the agreement, he would have to pay the social media company a $1bn break-up fee.

Updated: June 03, 2022, 4:00 PM
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