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As Musk tweets, advisers labor to keep Twitter deal on track

Michelle F. Davis, Liana Baker, Bloomberg News on

Published in News & Features

Breakup fee

The proposed takeover includes a $1 billion breakup fee for each party, which Musk will have to pay if the deal falls apart due to financing issues.

The merger agreement includes a specific performance provision that allows Twitter to force Musk to consummate the deal, according to the filing. That could mean, should the deal end up in court, that Twitter might secure an order obligating Musk to complete the merger rather than winning monetary compensation for any violations of it.

Twitter’s board has no reason to renegotiate the deal or reconsider the price, people familiar with the matter said, and it plans to enforce its rights under the merger contract to keep the deal intact.

Twitter Chief Executive Officer Parag Agrawal is attempting to run the company as normal despite the very unusual circumstances. His decision to cut costs and fire two top product executives last week came as a surprise to employees, leading to speculation that Musk was behind the decisions.

Agrawal dismissed those notions in a tweet thread last week. “While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter,” he wrote. “I won’t use the deal as an excuse to avoid making important decisions for the health of the company, nor will any leader at Twitter.”

Positive meeting

 

In a recent meeting at Twitter’s San Francisco office between Musk and Twitter executives, including Agrawal and finance chief Ned Segal, the group discussed operational matters and the tone was generally positive, according to a person familiar with the details of the gathering.

On the platform, meanwhile, Agrawal and Musk have been sparring over how the social media giant handles so-called automated bots. In one exchange, Musk responded to a lengthy thread on the company’s methodology by posting a poop emoji.

At the very least, the bankers who got involved knew that Musk can be unpredictable. He signed the deal without doing any due diligence on his target, rushed together a financing package in days, and hasn’t abandoned his penchant for tweeting in the middle of the night.

Navigating the chaos successfully may ultimately prove lucrative for bankers.

Twitter advisers Goldman Sachs Group Inc. and JPMorgan Chase & Co. stand to collect a combined $133 million in fees if the deal closes.

For the advisers, the kudos — in addition to the potential fees windfall — of signing onto a marquee transaction can also offset the risk, people close to the deal said. Watching an acquirer use social media to attack the company he’s agreed to buy, though, pushes the boundaries of what they expected to happen.

©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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