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US court stays Twitter-Elon Musk trial, asks to close deal by October 28

Twitter told court that Elon Musk’s proposal should be rejected due to lack of trust.

Wilmington:

A Delaware judge ordered a halt to Twitter Inc’s lawsuits against Elon Musk on the eve of the trial to give the billionaire time to finance his $44 billion acquisition of the social media platform, according to a Thursday court filing. .

The lawsuit was put on hold until 5 p.m. EDT on October 28 to allow Musk, chief executive of electric car maker Tesla Inc., to finance the deal.

Judge Kathleen McCormick said that if the deal doesn’t happen close to her deadline, the parties will have to contact her for a November trial. Musk was due for a hearing on October 17 and his statement was adjourned by mutual consent on Thursday.

Investors were assured that the order would end several days of confusion about the status of the deal.

Twitter shares, which ended the day down 3.7%, gained 2.7% in after-hours trading.

The world’s richest man said this week he would buy Twitter at a price he agreed to in April, $54.20 per share, but stipulated the deal on receiving debt financing.

It marked a reversal for Musk, who has locked in litigation with Twitter for months as he tries to pull out of the deal. He claimed that Twitter misled him about the number of actual users on his platform, among other claims.

Musk told a court Thursday that the banks are working cooperatively to complete the deal, but they need more time, arguing that the months to go through trial and appeal are still a matter of course. The brief delay was better.

Twitter said the court filing judge should decline the motion and that Musk’s plan was “an invitation to further mischief and delay,” in a sign of a lack of trust between the parties.

Twitter said Musk should close next week and said a corporate representative for a lending bank testified on Thursday that Musk had not yet sent him a lending notice and did not state that he intended to close. keeps.

Major banks that have committed to fund $12.5 billion, or about 28% of the deal, could face huge losses as the rapid pace of interest rate hikes has increased market volatility and increased the need for leveraged financing. Hunger is reduced.

“There is still some uncertainty as to whether Elon can find actual financing to make the deal,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center.

Musk has raised $15.4 billion by selling shares of Tesla this year and is leaning on big investors for financing, prompting speculation whether he will buy more of the electric-automaker’s stock to complete the deal. Will sell

“The funding will eventually end in some way or another. It’s a point to negotiate terms at this stage,” said Robert Gilliland, managing director of Concenture Wealth Management.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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