Twitter’s board said it plans to enforce its $44 billion buyout agreement from Elon Musk, saying the transaction is in the best interests of all shareholders.
“We have the intention of close the transaction and do comply with the merger agreementthe board said Tuesday in a statement sent to Bloomberg News. Directors had previously voted unanimously to recommend that shareholders approve Musk’s $54.20 per share offer.
The proposed acquisition includes a $1 billion breaking fine for each party, which Musk would have to pay if the deal falls apart due to financial problems. But Musk may not be able to just walk away with the fine.
The merger agreement includes a specific performance provision that allows Twitter force Musk to consummate the deal, According to the document. That could mean that if the deal ends up in court, Twitter could get an order forcing Musk to complete the merger rather than get monetary compensation for any violations of the deal.
The board’s statement comes as Musk appears to be maneuvering to withdraw or renegotiate his offer.
Musk said last week that the deal was “on hold” until he gets more information, specifically evidence, from Twitter that the so-called spam bot they represent less than 5 percent of its users.
On Monday, Musk fueled speculation that he might try to renegotiate the acquisition and told a tech conference in Miami that a viable deal at a lower price It wouldn’t be “out of the question.”
Twitter has said it is committed to completing the sale. The Actionswhich had fallen for seven consecutive trading days, closed Tuesday with a rise 2.5 percent to $38.32still very below the offer price.