Hindustan Times ST (Mumbai) - Live
Twitter, Musk talks turn cordial as buyout nears
CALIFORNIA: Advisers to Twitter Inc. and Elon Musk are hard at work trying to get the $44 billion deal closed by the end of the month, according to people familiar with the matter.
Both sides’ bankers and lawyers are preparing paperwork for the buyout to be completed by the 28 October court-issued deadline, the people said, asking not to be identified because the matter is private.
After months of public acrimony and accusations, talks between the two sides have turned cordial and are focused on closing the transaction rather than litigation, according to one of the people.
The Wall Street banks involved, led by Morgan Stanley, are also ironing out the steps needed to finalize funding about $13 billion of debt commitments. One of the banks has told its staff to expect a borrowing notice from Musk on Tuesday, said another person familiar with the matter.
Representatives for Twitter and Morgan Stanley declined to comment. A spokesperson for Musk didn’t immediately respond to a request for comment.
It’s unclear what led to the breakthrough between Twitter and Musk. In early October, their talks were stuck over Musk’s statement that his offer was contingent on receiving $13 billion in debt financing, even though banks were already on the hook to provide the debt through a commitment letter from April.
Another sticking point was that Musk had been seeking to reserve his rights to file a fraud lawsuit over his claims the platform’s executives misled him and other investors about the number of spam and automated accounts, Bloomberg News reported.
Musk said on Wednesday on a Tesla Inc. earnings call that he was “excited about the Twitter situation.”
He described the social media company as an asset with “incredible potential” that has “sort of languished for a long time.” He also said that, at $54.20 a share, he was obviously overpaying for it.
The transaction closing would follow a roller coaster of events that started in April with the deal announcement. Musk previously tried to walk away from his offer, prompting Twitter to sue to force him to fulfill the contract. A judge delayed a planned trial that had been set for 17 October to give the two sides more time to finalize the details.
Earlier this week, Twitter froze the equity awards accounts for employees in anticipation of the deal closing.
The relative calm may not last long.
Potential investors are being told Musk plans to cut 75% of Twitter’s workforce, which now numbers about 7,500, and expects to double revenue within three years, said a person familiar with the matter. Musk’s plans also would allow for the return of former President Donald Trump and others who have been kicked off the platform because Twitter will loosen content moderation standards, that person said.
The Washington Post reported earlier that Musk plans to slash Twitter’s workforce by almost 75% in a matter of months. Musk had told investors he intended to shrink staff in his initial pitch to bankers for funding, Bloomberg News reported in April.
In a memo to staff following the Washington Post report, General Counsel Sean Edgett warned workers to expect “tons of public rumors and speculation” as the closing of the deal nears. “Since the merger agreement has been in place, there have been no plans for any companywide layoffs,” he said.