Twitter’s official agreement to be acquired by Elon Musk was disclosed in a Securities and Exchange Commission (SEC) filing Tuesday afternoon which includes an option for the company to terminate the sale for a more lucrative proposal.
Twitter’s board of directors unanimously approved on Monday a $44 billion definitive agreement to be acquired by Musk in which Musk will pay $54.20 per share to take control of the company.
The deal disclosed in the SEC filing states that the deal may be terminated by either side if it has not been completed by October 24, 2022, or if Twitter’s shareholders fail to adopt the Merger Agreement.
“Twitter may terminate the Merger Agreement in certain additional limited circumstances, including to allow Twitter to enter into a definitive agreement for a competing acquisition proposal that constitutes a Superior Proposal,” The filing adds. “Parent may terminate the Merger Agreement in certain additional limited circumstances, including prior to the adoption of the Merger Agreement by Twitter’s stockholders if the Board recommends that Twitter’s stockholders vote against the adoption of the Merger Agreement or in favor of any competing acquisition proposal.”
If either side terminates the agreement they may have to pay a $1 billion termination fee to the other side depending on the situation, including if Musk were to fail to secure enough debt funding to complete the $44 billion sale.