Musk Threatens to End Deal with Twitter | Hacker News Reader

Musk Threatens to End Deal with Twitter

wsj.com

7 pointsmarban7 comments

One part entrepreneur, one part con man.

He waived detailed due diligence when he made a clear offer. Now he won't proceed without due diligence to decide if his offer was too high.

Did he? Without the contract, it's impossible to know.

Due diligence and "fraud" are two different things.

If twitter's numbers are garbage, how is he supposed to do his due diligence before getting the data?

As a normal person, not involved in mergers and acquisitions, it seems perfectly reasonable to make an offer based on the presented facts, and then dig in to make sure they are correct before finalizing the deal.

If twitter won't give the data NOW, why would they give it to a prospective buyer?

> Did he? Without the contract, it's impossible to know.

The merger agreement is publicly available from the SEC [0]. In particular, Articles VI and VII have the conditions to the merger, and due diligence is not among them (as far as I saw, at least).

In addition, the fact that Musk waived due diligence is explicitly spelled out in the proxy statement Twitter filed regarding the acquisition [0]:

> Later on April 21, 2022, ... Mr. Musk also disclosed that his acquisition proposal was no longer subject to the completion of financing and business due diligence. > > <snip> > > The Twitter Board determined not to contact other parties at this time based on ... (3) the likelihood that other potential acquirors would require substantial due diligence, creating a delay and risk to reaching the signing of such a potential transaction

This was signed off on by Musk and the Chair of Twitter's Board of Directors, so I think it's reasonable to presume it is accurate.

> it seems perfectly reasonable to make an offer based on the presented facts, and then dig in to make sure they are correct before finalizing the deal.

Sure, that's reasonable, but that's not what Elon did. He didn't make an offer conditioned on due diligence, he outright agreed to purchase Twitter without such a condition.

[0]: https://www.sec.gov/Archives/edgar/data/1418091/000119312522...

[1]: https://www.sec.gov/Archives/edgar/data/0001418091/000119312...

What's twitter going to do? Sue to get the one billion breakup fee and end up having to submit to discovery?

The facts are very much in their favor. I think if anything, they are scared of what happens to agreeing to a deal with Musk knowing the impact it could have on their stock if it falls apart. A billion isn't a lot of money if their stock tanks 20 billion as a result of the deal falling apart.

If it really comes down to it, Twitter could sue for a lot more than $1 billion - they could sue for specific performance, which in the best case for Twitter would effectively force Elon to go through with the purchase at the original price.

How about nothing? The same as the value of an offer from Musk.

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