Twitter Shareholders Are Poised to Approve Elon Musk Takeover Deal

Tuesday - 13/09/2022 06:58
Early votes suggest the acquisition will be approved by a wide margin, say people familiar with the matter
PHOTO: AMY OSBORNE/AGENCE FRANCE-PRESSE/GETTY IMAGES
PHOTO: AMY OSBORNE/AGENCE FRANCE-PRESSE/GETTY IMAGES

Twitter Inc.’s TWTR -1.85%▼ shareholders are poised to approve the $44 billion takeover that Elon Musk is now trying to exit, according to people familiar with the matter, putting the deal’s fate in a Delaware judge’s hands as the social-media company tries to force the billionaire to follow through with the purchase in court.

Early votes show investors approving the deal by a wide margin, the people said, though there is always a chance that the results could change as shareholders can alter their votes through a meeting scheduled for Tuesday at 1 p.m. Eastern time.

Mr. Musk, the company’s largest shareholder with a roughly 10% stake, hadn’t voted his shares one way or another as of Monday afternoon and was unlikely to given that he has alleged that Twitter breached the merger agreement, some of the people said. The agreement requires Mr. Musk to vote his shares in favor of the deal, though his support isn’t crucial if enough other investors back it.

Other big Twitter shareholders, including index-fund managers who together control roughly 20% of Twitter’s stock, are poised to support the deal, some of the people said.

Mr. Musk agreed in April to pay $54.20 a share for Twitter. The social-media company’s shares have been trading well below that since he tweeted in May that the deal was “on hold,” a prelude to his later move to back out of it. That means many shareholders stand to gain handsomely if the deal closes on its original terms. The stock closed Monday at $41.41. 

Analysts expect Twitter’s shares to drop significantly if Mr. Musk finds a way to walk away without paying a hefty fee. 

In July, Mr. Musk unveiled a plan to bail out on the deal over claims Twitter misrepresented the number of spam accounts on its platform. Twitter then sued him to follow through, arguing that Mr. Musk had a change of heart as the market soured and is still under obligation to complete the deal. The two sides are set to face off in the Delaware Court of Chancery beginning Oct. 17.

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Author: Editors Desk

 Keywords: Twitter, Elon Musk

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