Elon Musk will have to pay Twitter a $1 billion termination fee if he doesn’t go through with his $44 billion acquisition of the social network, announced on Monday, per a new SEC filing. The filing, which details the terms of the agreement, indicates Twitter would have to pay the same fee under specific circumstances.
The billionaire tech exec agreed to acquire Twitter and take the company private at $54.20 per share, valuing the company at around $43.4 billion.
The funds for the deal are being pulled from several sources, including financing from Morgan Stanley and other financial institutions which have committed to providing $13 billion in financing, along with $12.5 billion in margin loans to Musk, against his shares in Tesla and other companies. Musk himself is expected to provide equity financing of approximately $21 billion.
If Musk requires an exit from this agreement for any reason, it will come at a relatively steep price, it seems.
The filing also notes that the deal could be terminated if it doesn’t close by 5 PM PT on October 24, 2022. However, it does lay out a provision to extend the termination date for an additional 6 months if needed to meet select closing conditions related to antitrust law, foreign investments laws, or other governmental actions that could impact the agreement from closing during that timeframe.
More to come…