Twitter hiring heavy -level lawyers' teams to "see the court" with Musk, and the acquisition of transactions has evolved into a legal dispute?

21st Century Economic Herald Profile Reporter Li Yinong, Southern Finance All Media Profile reporter Zhang Yuxiao Shanghai report

After Musk's acquisition of the social media platform Twitter, after experiencing a few months of tug -of -tug, there was a storm.

On the afternoon of July 8th local time, Elon Musk, CEO of Tesla, sent a lawyer's letter to Twitter, saying that because Twitter "made a false and misleading statement" and " Violation of "multiple terms of the initial agreement, so it decided to terminate the $ 44 billion acquisition agreement.

In response, Bret Taylor, chairman of Twitter Company, said on the 9th that the Twitter board of directors will be committed to completing the transaction in accordance with the price and terms agreed with Mr. Musk, and plans to take legal actions to implement the merger agreement; at the same time Emphasize confidence in the court to win in the court.

At this point, Musk's approach to Twitter seems to be completely out of track. How will it end in the future? This is once again the focus that affects the nerves of the industry.

Twitter hire the super lawyer team to "see the court"

Musk's "change of hexagrams" makes the entanglement between it and Twitter is becoming more and more complicated, and it is likely to become a protracted legal dispute.

Twitter will plan to file a lawsuit with Musk at the beginning of this week. According to sources, Twitter has hired a heavyweight law firm, WACHTELL, Lipton, Rosen Katz LLP to prepare to prosecute Musk.

According to the 21st Century Business Herald reporter, the law firm hired by Twitter is not small. Wachtell Lipton, which has dealt with many complex mergers and acquisitions cases, has rich experience in the areas of mergers and acquisitions and acquisitions, and is famous for its outstanding business performance. In the past 20 years, one of the most popular anti -acquisition measures, the "Poison Pill Project" -The target company has used a defensive measure to resist malicious acquisitions -one of the founding partners of the institute Martin Li Li. Martin Lipton invented in 1982.

According to reports, there are two extremely critical lawyers in the legal team hired by Twitter. One is William Savitt. As one of the senior authorities in the industry, Savitt played a leading role in multiple M & A lawsuits, and has provided many companies in the merger. For example, the merger of the New York Pan -EU Stock Exchange and the Intercontinental Exchange, the privatization sale of Dell, and the acquisition of the Hudson Bay Corporation of the US luxury chain Saks Fifth Avenue.

The other is Leo Strine. It is worth noting that before joining the law firm, STRINE has more than 20 years of work experience in the court in Tellawa; from 2014 to 2019, he served as the chief judge of the Supreme Court of the state; before that, he had been in the Esselete The Delaware Court of Chancery was the judge. According to people familiar with the matter, they disclosed to the media that Twitter plans to initiate a lawsuit to Musk in the Trust of Tellawa.

As a response, Musk opened Quinn Emanuel Urquhart Sullivan Law Firm. It is reported that this is a well -known law firm that had previously cooperated with Musk many times; in 2019, he successfully defended it in a defamation allegations against Musk. Quinn Emanuel has also dealt with Samsung's patent lawsuit on Apple, and it is among the best in various related industry surveys.

As a legal dispute is about to kick off, where will this dramatic acquisition transaction go?

What does Musk do "regret"?

On April 25, local time, Musk's news about $ 44 billion was a sensation. At that time, Musk said that Twitter had "huge potential", and vowed that after completing the acquisition, it would make the company "better than ever." At this point, after the two sides experienced a series of dramatic tug -of -tug, everything seemed to have become a foregone conclusion.

But things are far from expected.

Shortly after the two parties reached an agreement on the acquisition, Musk, the "good change", began to change the argument. It seemed to be paving the way for exit transactions, which also made the market predicting that the acquisition was very likely to change. Last Friday, the market's concerns were confirmed. In a document, Musk said he was trying to terminate the transaction with Twitter because Twitter seriously violated multiple terms in the agreement, including the company's number of robots and false accounts on the platform. Accurate statement.

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. Twitter executives previously emphasized at the media conference that the company manually review thousands of accounts every quarter to ensure this proportion.

It is worth noting that in the agreement signed by the two parties, it includes the "breakup fee" agreed to pay $ 1 billion to prevent the transaction from exiting the transaction for specific reasons. However, in the documents submitted to the regulatory agency, the fee was not mentioned. Relevant analysis pointed out that Musk terminated transactions on the grounds of Twitter's violation of transaction clauses, or tried to "retreat" without paying any fees, or there was another picture behind it.

Among them, it is not uncommon to use terminating transactions as a threat to try to return to the negotiating table. Earlier, the E -Vi Vendon Group (LVMH) had filed a lawsuit, asking for withdrawal from the acquisition of the jewelry brand Tiffany Company. The two parties later reduced the acquisition price by about $ 420 million. Therefore, most of the current views believe that Musk's move does not seem to be to terminate the acquisition, but because of "bargaining". Analyst Brent Thill said in the report: "Musk is not confirmed as an excuse for exit transaction, perhaps just covering up the regret of this expensive transaction."

Ann Lipton, a corporate governance professor at Tulane Law School at the University of Dulan, pointed out that Musk's differences with Twitter on the issue of spam accounts may not constitute a major default on the agreement, which means that Musk's statement is legal in law. Can't stand the scrutiny.

Eric Talley, a professor of law at Columbia University, also pointed out that Musk's argument is "very weak" and is likely to some extent a strategy to try to threaten and bargain. Litigation will be a long process of pain, and it is possible for both parties to consider accepting reconciliation or reducing transaction prices.

Berkeley Center for Law and Business. ADAM STERLING said that from the perspective of Twitter, they need to fight against Musk and save transactions. Sterling speculates that after being resorted to the court, the differences are likely to be at the end of the reconciliation of "allowing both parties to save face".

Twitter is not good

No matter how the situation will develop, now, the threat of Musk's exit has a great impact on Twitter. Wedbush analyst Dan Ives stated in a report that "this is a disaster for Twitter and its board." Worried that the two sides would start "long -term court struggle."

As soon as the news of the termination of the transaction came out, Twitter's stock price fell 5.1%last Friday to $ 36.81; as of July 11, local time, it fell sharply by 11.3%again.

A US stockholder told the 21st Century Business Herald reporter that after learning that Musk plans to acquire Twitter, she started Twitter's stock for the first time. Now, the stock price she holds has "fallen by about 30%." The interviewee said worriedly that in her opinion, the development of the whole situation and the change of public opinion wind direction should not be underestimated.

The incident also caused confusion and confusion within Twitter. After Musk's announcement of trying to withdraw from the transaction, Twitter employees have released various "spit" on this emergency. Some employees bluntly said that "the entire company is like entering the autonomous driving mode"; some employees said satirically that they learned about this news through friends and not the company.

It is worth noting that soon after Twitter's general legal adviser Sean Echits said in a memorandum that because the situation has become "a legal issue in progress," employees are required to avoid being released on social platforms or or on social platforms. Share "any comments on the merger agreement". At the same time, he may continue to share information at the time of allowing the situation, but the information that can be shared is "very limited".

The development of the situation also pushed Twitter's increasingly sluggish business state to people's eyes. According to reports, in recent months, Twitter's business has deteriorated. Twitter CEO Parag Agrawal said in a memorandum to employees in May that the company did not achieve its business and financial goals. Since April, the company has stopped providing investors with forward -looking financial outlook and waiting to be acquired.

At the same time, in view of the main source of income from Twitter -advertisers are worried about the uncertainty of the acquisition transaction, and Twitter's related business is likely to continue to deteriorate. Musk's lawyer also emphasized this in a letter submitted to the US Securities and Exchange Commission on Friday. He wrote that the company's "declining business prospects and financial prospects" made Musk hesitate.

Whether this long -term court struggle was re -negotiated to complete the acquisition or ended with the payment "breakup fee", it was not sure. But for Twitter, any result seems to be unable to get rid of the dilemma facing it.

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