The news shook the internet earlier this week. After days of ups and downs, Elon Musk finally managed to buy Twitter for a modest $44 billion. The job was not easy for the businessman, as most of the company’s shareholders initially opposed this transaction. They also feared that the billionaire would drastically change the way the platform works.
If Elon Musk’s project against Twitter was still unclear, the latter clearly felt it was more prudent to provide these backs. As a matter of fact, the New York Times reveals that if canceled, Twitter may have to pay $1 billion to Tesla’s CEO and vice versa. A rather banal clause after all in this type of contract: “it’s actually a pretty simple merger agreement”says Steven Davidoff Solomon, a law professor at the University of California.
Canceling Twitter takeover could cost $1 billion
According to Twitter, the transaction should be finalized within 3 to 6 months. Until then, Twitter may decide to turn to a more generous investor. Conversely, Elon Musk may lose the amount collected for the purchase. In particular, the billionaire explained that a large part of these savings came from loans he took from various banks, complementing it with Tesla shares and then 21 billion in cash.
In either case, the injured party will therefore be compensated up to $1 billion. Additionally, if the purchase is not completed by October 24, 2022, either party can cancel the transaction without any reflection. Anyway, now there’s very little chance that thing won’t happen. Competition regulators don’t step in unless Elon Musk buys a competitor company.
Source : New York Times
