It was hard to look away from the Elon Musk-Twitter chronicles that spanned a few weeks. Musk became the social media platform’s biggest shareholder. Then Musk was set to join Twitter’s board. And then he wasn’t.
Then, it looked like he was set to buy Twitter and take it private, then it didn’t. Then it did again. Now, as Musk and Twitter are looking to close the $44 billion buyout offer, each party has set out terms and conditions.
One of the details is that if either party leaves the deal, they have to pay the other a $1 billion kill fee. Additionally, Twitter must cease negotiations with other potential buyers and stop actively looking for other buyers.
But if a new buyer appears and intrigues Twitter, the company has to tell Musk, who will have four days to make a better offer. Even if Musk does not change his offer and Twitter elects to go with the other buyer, it still owes Musk the termination fee.
Should Musk fail to get funding to finance the deal or change his mind, he will owe the kill fee.
Another rule, which turns attention to Musk’s colorful appearance on social media, says the billionaire cannot “disparage the company or any of its representatives.”
Perhaps Musk anticipated such a rule as he deleted a series of critical tweets a few weeks ago.
Also, neither party can cite public backlash or COVID-19 as a reason to abandon the deal.
Perhaps one of the more interesting stipulations, the agreement clarifies Twitter will merge into another company owned by Musk rather than Musk buying Twitter outright.
Musk created three holding companies called X Holdings I, II and III to accommodate the merger. The SEC filing reflects the rule with the top reading “Agreement and Plan of Merger by and among X Holdings I, Inc., X Holdings II, Inc. and Twitter, Inc.”