A judge has delayed a looming trial between Twitter and Elon Musk, giving the Tesla CEO more time to close his $44 billion deal to buy the company after months spent fighting to get out of it.
Musk had asked to halt the upcoming Delaware court trial, where the Tesla billionaire was expected to fare poorly against Twitter’s lawsuit to force him to complete his April merger agreement. Musk revived the takeover offer on Monday but said he needed time to get the financing in order.
Chancellor Kathaleen St. Jude McCormick, head of the Delaware Chancery Court, said Thursday that Musk and Twitter now have until October 28 to close the deal. A trial originally set for October 17 will happen in November if they don’t, she said.
Twitter had asked McCormick earlier on Thursday to proceed with the trial, saying the billionaire refuses to accept the “contractual obligations” of his April agreement to buy the social media and take it private.
Twitter disputed Musk’s claim that the San Francisco-based company is refusing to accept the new bid, which Musk told the company about earlier this week after trying to terminate the deal over the summer.
The company has been seeking a court order to force the completion of the merger and said it intends to close the deal at the agreed-upon price, but described Musk’s move to delay the trial as “an invitation to further mischief and delay.”
Twitter said Musk should be have been aiming to close the deal by Monday.
“But they aren’t. Instead they refuse to commit to any closing date,” said the letter from Twitter lawyer Kevin Shannon. “They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract.”
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Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow “wiggle room for Musk to walk away again.”
Twitter apparently hasn’t got the certainty it wants.
“Otherwise, we would’ve seen a joint filing to the court on how the two sides want to proceed,” Jennings said. “As of right now, the trial train keeps rolling until both parties or the court apply the brakes.”
Eric Talley, a Columbia University law professor, tweeted on Thursday that Twitter “is absolutely right not to take ‘yes’ for an answer, and everyone knows why. (They tried that in April and it didn’t go so well).” He added that Twitter would, however, take a “certified bank transfer” from Musk.
Musk attorneys argued that Twitter was disagreeing with the trial delay “based on the theoretical possibility” of Musk not coming up with the financing, which they call “baseless speculation.”
They said Musk’s financial backers “have indicated that they are prepared to honor their commitments” and are working to close the deal by October 28.
Twitter’s shares fell $1.91, or 3.7%, to close at $49.39 on Thursday. It was the stock’s second day of declines following a surge of more than 22% on Tuesday after Musk made his renewed offer to buy the company.