A Florida pension is suing to prevent a quick merger for Elon Musk's proposed $44 billion Twitter buyout
- A pension fund in Florida is suing Twitter over Elon Musk's proposed buyout, reports said Friday.
- The Orlando Police Pension Fund claims Musk's financial arrangements for the deal should prevent the transaction from closing before 2025.
A pension fund in Florida is legally challenging Elon Musk's potential $44 billion purchase of Twitter, saying his financial arrangements with other shareholders of the social media platform should prevent the deal from closing before 2025, reports said Friday.
The Orlando Police Pension Fund filed a complaint in the Delaware Chancery Court against Twitter and its board, including Chief Executive Parag Agrawal, Reuters reported.
It said Delaware law prohibits a quick merger because Musk had agreements with other big Twitter shareholders to support the buyout, including Morgan Stanley, his financial adviser, and Twitter founder Jack Dorsey, according to Reuters.
Such arrangements trigger a Delaware law that calls for a three-year delay in closing such deals, the fund claimed, according to a Bloomberg report. The arrangements made Musk an "interested shareholder" who has to wait three years to wrap up the deal or win the support of investors who control "at least 66 2/3% of Twitter's outstanding voting stock" and were independent from Musk.
Twitter in April accepted Musk's bid of $54.20 a share to buy the company, with the billionaire citing his aim to protect free speech as a reason he wanted to take Twitter private. Musk last month confirmed in a regulatory filing he had secured several financing commitments to support the Twitter takeover.