Delaware Court Orders Elon Musk To Complete Acquisition Of Twitter Inc By October 28

Elon Musk had to complete Twitter Inc's acquisition, before October 28. (photo: doc. pixabay)

JAKARTA - A judge in a Delaware court on Thursday, October 6, ordered the termination of Twitter Inc's lawsuit against Elon Musk on the eve of the trial, to give the billionaire time to finance a $44 billion takeover of the social media platform.

The decision follows days of uncertainty about Musk's intentions and removes threats that the erratic businessman must testify under oath this week about his claims that Twitter fraudulently misled him.

The judge's order said Musk, the world's richest man, failed to shut it down by 5 p.m. October 28 EDT deadline, he will schedule the trial for November.

"We expect to close at $54.20 on October 28," Twitter said in a statement. In an earlier court lawsuit, the company urged judges to reject the proposal, calling Musk's plan an "invitation for further damages and delays."

Musk, chief executive of electric car maker Tesla Inc, was due to go on trial on October 17 and Thursday's deposition was postponed by mutual agreement.

Twitter shares, briefly down 3.7% at 49.39 dollars, were up 1% after a few hours as investors looked calm after days of confusion. This week, Musk said he would buy Twitter for the $54.20 per share he agreed to in April, on the condition that the deal secures debt financing.

It marked a reversal for Musk, who spent months in litigation with Twitter as he tried to get out of the deal. He claims Twitter misrepresents the number of real users on its platform, among other claims.

Musk said in court Thursday that filing banks were working cooperatively to fund the deal, but he needed more time. He argued that a short delay was better than the months needed for a trial and appeal.

Twitter said Musk should close the deal next week and a company representative for the lending bank testified last Thursday that Musk had not sent them a loan notice and had not communicated that he intended to close the deal.

Large banks committed to funding $12.5 billion, or about 28% of the deal, could face heavy losses as the rapid pace of interest rate hikes has increased market volatility and reduced appetite for leveraged financing.

"There's still some uncertainty based on whether Elon can find the actual financing to do the deal," said Randy Frederick, managing director of trading and derivatives for the Schwab Center.

Musk himself has raised $15.4 billion by selling Tesla shares this year and is leaning on big investors for some of the financing, leading to speculation over whether he will sell more Tesla shares to fund the deal.

"Financing will eventually go through one way or another. It's just a point of negotiating terms at this stage," said Robert Gilliland, managing director at Concenture Wealth Management.