Musk trial sets Twitter deal deadline

A Delaware judge halted a court case against Elon Musk over his US$44 billion ($77.69b) purchase of Twitter, giving the parties more time to complete the deal.

Judge Kathaleen St. J. McCormick said if the transaction is not done by 5pm on October 28, she will set new trial dates in November.

The ruling hands a partial victory to Musk, who earlier in the day had asked the judge to pause Twitter’s lawsuit against him ahead of an October 17 trial date. But it also gives Musk a deadline by which he needs to make good on his April agreement to pay US$54.20 a share — an obligation he previously tried to abandon.

Twitter shares rose as much as 3.5 per cent in late trading after the judge’s ruling, a sign of optimism that the order gives Twitter some of the certainty it was seeking.

Acrimony between the parties escalated yesterday, with both sides trading barbs in court filings. Musk requested a pause in the hearing, saying the social media company “will not take yes for an answer” after he proposed consummating the buyout in an October 3 letter. His lawyers targeted an October 28 closing.

Twitter had objected to the request, saying Musk “can and should” close the deal next week.

Talks between the two sides had snagged after Musk said his offer was now contingent on receiving US$13b in debt financing. The original deal did not contain such a contingency. Musk said Twitter was resisting halting court proceedings based on the “theoretical possibility of a future failure to obtain the debt financing”.

Following the judge’s ruling, Twitter general counsel Sean Edgett sent an update to staffers, saying the company won’t be going to court on October 17 and will work to close the deal by October 28 as ordered.

“Our intention remains the same: To close the acquisition at the price and terms in the original merger agreement,” Edgett wrote in the memo. “Thank you to all of the teams working hard to navigate these twists and turns.”

Within hours of McCormick’s order, Musk began tweeting about his plans for Twitter. “There will be very rapid product evolution,” he wrote.