Elon Musk will have to pay Twitter a $1 billion fee if the Tesla CEO terminates his $44 billion cash deal to buy the social media platform, the company said in a regulatory filing on Tuesday.
The fee would have to be paid under certain circumstances, such as if Musk is not able to secure enough equity, debt and or margin to finance the acquisition, the Securities and Exchange Commission filing showed.
Twitter (ticker: TWTR), which is subject to “no-shop” restrictions preventing it from talking to other suitors, will be required to pay the same $1 billion fee under certain circumstances, according to the same filing. These include Twitter accepting a competing acquisition proposal or recommending shareholders vote against Musk’s offer.
On Monday, Twitter’s board agreed to Musk’s $54.20-a-share cash offer for the social media company in one of the biggest ever leveraged buyout deals.
Musk has raised $25.5 billion in debt — including a margin loan of $12.5 billion secured against his shares in Tesla (TSLA) — from a group of banks led by Morgan Stanley,
The SEC filing also disclosed that either Twitter or Musk could terminate the deal if it is not closed by Oct. 24. The date could be extended for another six months to meet certain closing conditions such as antitrust and foreign investment clearances.
Write to Lina Saigol at [email protected]
Credit: www.marketwatch.com /