Twitter shareholders to vote on Elon Musk’s $44bn takeover offer

The billionaire’s purported termination of the transaction is 'invalid and wrongful', the social media platform says in an SEC filing

Twitter filed a legal challenge against Elon Musk on July 12 for breaching an agreement to acquire the company for $44 billion. Reuters
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Twitter will hold a special shareholder meeting on September 13 to vote on billionaire Elon Musk's $44 billion offer to take over the social media platform, the company said in a regulatory filing to the US Securities and Exchange Commission.

The company’s shareholders will also be asked to vote on a proposal to “approve, on a non-binding, advisory basis, the compensation that will or may become payable by Twitter to its executive officers in connection with the merger”, according to the filing, which was signed by chief executive Parag Agrawal and board chairman Bret Taylor.

Shareholders will be required to “vote on a proposal for the adjournment of the special meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the merger agreement”, Twitter said in the filing on Tuesday.

Mr Musk, chief executive of Tesla, agreed to acquire Twitter for $44bn in April, pledging to pay $54.20 a share. Upon completion of the deal, the plan was for Twitter to be converted into a private company.

However, the deal is facing headwinds. On July 8, Mr Musk filed paperwork to terminate the transaction, claiming Twitter did not address inquiries on its “spam” or bot accounts, or provide him with relevant business information.

On July 12, Twitter filed a legal challenge accusing Mr Musk of breaching the agreement.

Mr Musk, who is also the founder of SpaceX, requested that the proceedings begin in February 2023, while the social network company argued for an expedited trial given the continuing public dispute.

A Delaware Chancery Court judge has scheduled an October date for the trial, which will take five days. The Delaware court is where many US business disputes are settled.

Twitter believes that Mr Musk’s purported termination is “invalid and wrongful”, and the merger agreement remains in effect, the San Francisco-based social media platform said in the SEC filing.

“Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to completing the merger under the merger agreement, and is an important and required step for our stockholders to receive the merger consideration,” the regulatory filing said.

“We are committed to closing the merger on the price and terms agreed upon with Mr Musk. Your vote at the special meeting is critical to our ability to complete the merger. Twitter’s board of directors unanimously recommends that you vote 'FOR' each of the proposals at the special meeting.”

Only Twitter shareholders as of the close of business on July 22 will be entitled to notice of, and to vote at, the special meeting, according to the SEC filing.

Twitter shareholders who do not vote in favour of the proposal to adopt the merger agreement will have the right to seek appraisal of the “fair value” of their shares of the company’s common stock in lieu of receiving $54.20 a share in cash if the merger is completed, the company said.

Only Twitter stockholders as of the close of business on July 22 will be entitled to notice of, and to vote at, the special meeting in September. AFP

Twitter's board unanimously determined that the merger agreement was fair to and in the best interests of the company and its stockholders, the filing said.

Last Friday, Twitter reported a second-quarter net loss of more than $270 million, compared with a net income of about $65.6m in the same period a year earlier.

Updated: July 27, 2022, 5:43 AM