Twitter is moving ahead with a shareholder vote on the merger with Elon Musk a few weeks before his lawsuit against Musk goes to trial. Twitter yesterday sent a letter to shareholders inviting them to a September 13 special meeting where they will be asked to approve the merger agreement that Musk is now trying to get out of.
“We are committed to closing the merger on the price and terms agreed upon with Mr. Musk,” Twitter CEO Parag Agrawal and Board Chairman Bret Taylor wrote. “Your vote at the special meeting is critical to our ability to complete the merger. Twitter’s Board of Directors’ strongly recommends that you vote ‘FOR’ each of the proposals at the special meeting.”
Noting that a five-day court trial is set to begin in October, the letter said, “Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to complete the merger under the merger agreement.” While Musk feels a “notice purporting to terminate the merger agreement,” the Twitter letter said the company “believes that Mr. Musk’s purported termination is invalid and wrongful, and the merger agreement remains in effect.”
“If the merger is completed, you will be entitled to receive $54.20 in cash, without interest and subject to any applicable withholding taxes, for each share of our common stock that you own,” the Twitter letter to shareholders said. Twitter’s share price was about $39 today.
Only Twitter stockholders who held shares as of July 22 will be eligible to vote at the meeting, which will be held via webcast. Musk bought over 9 percent of Twitter stock before offering to buy the company. Approval of the merger deal “requires the affirmative vote of the holders of a majority of the shares of our common stock,” Twitter said.
Musk complains about document access
Delaware Court of Chancery Judge Kathaleen McCormick last week ruled that the Twitter/Musk trial will happen in October, rejecting Musk’s request to delay it until February 2023. Musk claimed more time was needed for “complex, technical discovery” regarding Twitter’s spam-account data , which “will likely involve sifting through hundreds of billions of actions on Twitter and reviewing related sampling and control processes.”
Twitter lawyers called Musk’s spam complaint a “manufactured issue” that has no bearing on the case and said Musk hasn’t “present[ed] even a shred of supporting evidence” to support his claims that Twitter’s spam-account estimates are wrong. McCormick said that “delay threatens irreparable harm to the sellers” when she ruled that the trial must proceed in October.
The sides are now fighting over exactly when the five-day trial will begin, with Twitter seeking an October 10 start date and Musk asking for October 17. Musk also alleges that Twitter isn’t providing documents quickly enough.
Musk has been trying to disprove Twitter’s estimate that fewer than 5 percent of its monetizable daily active users (mDAU) are spam or fake. In a court filing yesterday, Musk’s legal team alleged that “Twitter refuses to begin immediate rolling document productions of certain categories of documents requested by defendants that are plainly relevant, do not require electronic searching, and are easily collected and produced.”
The information sought by Musk includes “certain data regarding how Twitter calculates its mDAU figures and the guidance provided to human reviewers who identify false and spam accounts at Twitter,” the court filing said. Musk’s filing that “immediate production of these documents is more than reasonable light of the expedited schedule in this case.”
Twitter has agreed to provide some documents “from categories that Twitter agrees are responsive” by the end of the week, Musk’s filing said. But Musk alleged that “Twitter will not agree to (1) identify what documents it purports are not relevant, (2) explain why it is only producing ‘some of’ the documents it grants are responsive, or (3) agree to produce anything earlier than ‘the end of the… week.'”
When contacted by Ars today, Twitter declined to comment on Musk’s filing.