Musk "regret marriage", Twitter hired a top lawyer group: see the court!

Bloomberg reported that on Sunday evening local time, Twitter has formed a heavyweight legal team Wachtell Lipton, Rosen & Katz (hereinafter referred to as Wachtell) to sue Tesla CEO Musk to respond to its termination of the pair on Friday Special $ 44 billion acquisition.

According to two people familiar with the matter, Twitter filed a lawsuit against Musk in the early this week to Musk to Musk.

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Twitter hires the strongest M & A law

"Poison Pill Project" comes from the hands of its partners

The British "Financial Times" reported that most U.S. listed companies were registered in Tellahua. Defense the company in the lawsuit.

According to a reporter from "Daily Economic News", Wachtell occupies the top of the list in the American law firm list. 2023 Latest VAULT Global Law Firm ranking data shows that WACHTELL ranks first among the best M & A laws firm in the Top 100 Law Firm. It has dealt with many complicated mergers and acquisitions, and the famous "Poison Pill Project" was invented by its founding partner in the 1980s.

It is reported that Twitter hired two key lawyers for his team. One of them was William Savitt, who had sued for radical investors on behalf of Anthem, Anthem, Anthem, auction houses in the Travist Court. The other is Leo Strine. He is the former chief of the Terlawa Judge Court. He has 20 years of experience in the judge of the state court. He served as the chief judge of the Supreme Court of the State in 2020 before joining the company in 2020.

However, Twitter may pay a higher lawyer fee. "Daily Economic News" reporter checked the statistics of Bloomberg News that the average transaction scale of WACHTELL was almost twice the average transaction scale of any other law firm in the top 10. The average value of each transaction in 2021 was 3.8 billion US dollars. Essence

Twitter refused to comment on the appointment of Wachtell, and Wachtell did not immediately respond to the comment request.

The Musk side introduced Quinn Emanuel Urquhart & Sullivan Law Firm. In 2019, the company helped Musk successfully defend a defamation allegations and represented him on behalf of a ongoing shareholder lawsuit that involved his failed to privatize Tesla in 2018. The company also handled Samsung (KRX: 005930, a stock price of 58,200 won, and a market value of 39.488 trillion won) patent lawsuit against Apple (AAPL, $ 146.35, and a market value of 2.38 trillion US dollars).

The "breakup fee" of more than 1 billion days is so simple

"Daily Economic News" reporter noticed that according to a document released by the US Securities and Exchange Commission on Friday, Musk will terminate the US $ 44 billion of the M & A and acquisition of Twitter, because Twitter seriously violates the more in the agreement The terms, including the company, have a "misleading statement" on the number of spam robots on its platform.

In addition, Musk also said that Twitter did not have normal business operations, implemented recruitment frozen, fired senior leaders, and other major resignation appeared. The "major violation" of the agreement.

But Twitter denied Musk's claims and repeatedly stated that the number of spam robots on the platform was less than 5%of the total user base. On July 7, Twitter executives stated at the media conference that the company manually review thousands of accounts every quarter to ensure a 5%proportion.

Since Musk's proposal for Twitter's acquisition, Twitter's stock price has fallen by more than 30%, and no other buyers have appeared. The Financial Times commented that in recent weeks, Twitter has announced a measure of large -scale layoffs and cutting costs. Due to the uncertainty of work and the doubt about whether Musk's "fulfilling commitment", the remaining employees have also lowered morale.

The Financial Times reported that many analysts and legal experts explained that Musk's concerns may just cover up the regrets of this expensive and highly leveraged transaction. That is, (Twitter) misleads investors as a false account as an excuse for exit transaction, "Jeffu ​​Rui stock analyst Brent Thill wrote in a research report on Sunday.

Eric Talley, a professor of law at Columbia University, also told the Financial Times that Musk's argument is "very weak", which is likely to to some extent a bargaining strategy that tries to threaten .. .... This will cause litigation to become a painful process, and they may wish to accept settlement or reduce prices.

According to the legal agreement signed by Musk with Twitter, if the acquisition transaction is interrupted, the party who violates the agreement may pay a $ 1 billion "breakup fee". But Musk may not be able to pay the "breakup fee" as simple as it is. According to the documents signed by both parties, the agreement allows Twitter to force Musk to complete the transaction. Bret Taylor, a member of the Twitter board of directors, said that Musk had received the intention of terminating the acquisition of Twitter, but "the Twitter Board is committed to completing the transaction at the price and terms agreed with Musk, and plans to take legal actions to implement the M & A agreement." Essence

According to the "Reference News" report, if there is an external reason that hinders the acquisition, such as the financial doubts of third parties, Musk can leave the negotiation by paying a fine of millions of dollars. But if the transaction breaks from Musk's doubts, there will be room for prosecution.

If Musk believes that the acquisition price is too high, Twitter may follow the practice of Jewelry brand Tiffany in 2020, Louis Vuitton Group (LVMH) attempting out of the acquisition agreement. LVMH finally acquired Tiffany at a price below the initial price.

It is this example that many people think that Musk's actions do not want to buy Twitter, but are trying to "bargain". Twitter's market value has fallen at least $ 9 billion since April 25.

Reporter | Li Menglin Zheng Yuhang (Internship) Editor | Tan Yuhan Lu Xiangyong Dubo

School Division | Wang Yuelong