Image Source: CNBC
Since Elon Musk made his bid to take over 100% ownership of microblogging platform Twitter public, the internet has gone into a frenzy.
In an unexpected turn of events, Elon Musk and Twitter were instantly sued on Friday by a Florida-based pension fund in the hopes of delaying Musk’s $44 billion buyout of the social media business.
The Orlando Police Pension Fund claims in a complaint filed in Delaware Chancery Court that Musk’s takeover cannot be completed until at least 2025 under Delaware law. The statement went on to clarify that the takeover is only legal if two-thirds of the stock is not “owned” by Musk.
Musk, who became an “interested investor” after purchasing at least 9% of Twitter’s stock in April, is now anticipated to undergo a takeover process and a lawsuit, both of which could derail and hinder his prospects of completing the buyout.
Elon Musk purchased a 9.5% interest in Twitter earlier this month, making him the social media company’s largest shareholder. After declining the company’s invitation to join the board of directors, Musk stated in a series of tweets that he had launched a $44 billion bid to buy 100% of Twitter’s stock. “I presented a proposal.” He took to Twitter to express himself. Following Musk’s declaration, the social media sphere flew into a frenzy, and he later tweeted, “I hope that even my harshest opponents remain on Twitter, because that is what free expression means.”
According to Forbes magazine, Musk, who also owns Tesla and Space X, is the world’s wealthiest person.
The lawsuit also names Twitter and its board of directors, including Twitter CEO Parag Agrawal.
According to the claimant, the case, which wants to postpone the merger’s completion until at least 2025, also asks the courts to declare Twitter directors to have breached their fiduciary obligations and recoup legal fees and costs.
Twitter’s top executives have declined to comment, and Elon Musk’s lawyers have yet to react to a request for comment on the current case.
Musk announced on Thursday that he had raised $7 billion in funding for the buyout, including from investors such as Larry Ellison, the Qatar state investment fund, and the world’s largest cryptocurrency exchange.
According to a filing with the US Securities and Exchange Commission, Ellison is putting $1 billion into the deal. According to the filing, Saudi Arabian billionaire Prince Alwaleed bin Talal, who had earlier opposed the takeover, consented to roll his $1.9 billion share into the deal.
The document also revealed that Musk’s $12.5 billion margin loan for the acquisition will be cut to $6.25 billion. The financing news came as CNBC claimed that Musk would serve as the social media platform’s interim CEO for a few months once the deal is completed. Musk had no financing lined up when he disclosed his plans to buy Twitter last month.
Musk, a self-described “free speech absolutist” who might influence how the San Francisco-based business moderates content, appears to share interests with several of the new investors.
Florida’s state pension system also owns Twitter, and the state’s governor, Ron DeSantis, indicated this week that if Elon Musk completes his takeover, the fund might profit by $15 million to $20 million.