Elon Musk has applied to the United States Securities and Exchange Commission (SEC) to acquire Twitter. Musk will pay Twitter a termination fee of $ 1 billion if the purchase announced yesterday does not take place.
Agreeing to pay $54.20 per share, Musk will buy the company with a total pricing of $43.4 billion. As a result of the agreement, it is also stated that Twitter will pay 1 billion dollars as a withdrawal fee under certain conditions.
Elon Musk and Twitter’s termination obligations became clear
It is stated that the funds for the agreement will provide a $12.5 billion margin loan against their shares in companies owned by Musk. Musk will take out $13 billion in loans from some financial institutions, especially Morgan Stanley. It is estimated that Musk will use approximately $21 billion in equity for the Twitter acquisition.
In the signed agreement, “If the Parent and the Acquisition Subsidiary fulfill their obligations to complete the Merger and the Parent Company does not finance equity, debt and/or margin loan financing, Parent will have to pay a $1 billion termination fee to Twitter if it fails to complete the Merger under the Merger Agreement.” statements are included.
In the previous report published on the subject, it was stated that Twitter will pay a 2.5 percent termination fee and Musk has no liability. According to the published agreement, however, both parties will have responsibility for the termination.
According to the partnership agreement, if the file is not closed by 17:00 on October 24, 2022, the purchase will be terminated. In some cases, it is stated that the termination date may be extended by 6 months.
The agreement ensures that Twitter will be open to other offers and will pay Musk the termination fee if it signs with a different company. Twitter will be able to terminate the deal if shareholders vote against it.
What do you think about Elon Musk’s acquisition of Twitter? You can express your ideas in the comments section and on the SDN Forum.
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