Twitter shareholders approve $44 billion Elon Musk buyout
Will proceed to trial in October
Twitter shareholders on Tuesday voted in favour of Elon Musk’s $44 billion takeover deal, a value of $54.20 per share. The company's stock opened Tuesday under $41 per share, nearly 25% below the deal price.
The vote came days after Musk sent a third letter to Twitter seeking to terminate their deal, with this one citing a $7.75 million severance payment the company made to its former head of security, Peiter Zatko, who blew the whistle about its alleged security and privacy vulnerabilities.
In the letter, Musk's lawyers claimed the payment made to Zatko and his counsel on June 28th violated a provision of the acquisition contract. Twitter agreed to not grant or provide any severance to employees in amounts outside “the ordinary course of business consistent with past practice,” the contract stated.
The payment was disclosed in a court filing by Twitter earlier this month, and gives Musk an additional reason to exit the deal, the letter states. In response, Twitter said it "has breached none of its representations or obligations under the agreement."
The approval from shareholders means the case between Musk and Twitter will proceed to trial in October. Musk will need to prove in court that Twitter violated the merger agreement. If he fails to do so, he’ll be required to pay a $1 billion fine or acquire Twitter for the agreed-upon price.
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