In this photo photo, Elon Musk’s Twitter seen displayed on a smartphone screen with the Twitter logo in the background in Chania, Crete, Greece, April 23, 2022.
Nikolas Kokovlis | Nurphoto | Getty Images
Elon Musk, CEO of SpaceX and Tesla, could be required to pay Twitter a $1 billion termination fee, under certain circumstances, such as if Musk fails to secure enough debt financing to complete his 44-year deal. billion to buy the company, according to a new SEC filing.
From the filing (Parent is referring to the special company Musk created to buy Twitter):
As described above, if the conditions of the Parent Company’s and the Acquiring Subsidiary’s obligations to consummate the Merger are satisfied and the Parent Company fails to consummate the Merger as required under the Merger Agreement, including because the equity, debt and/or margin loan financing is unfunded, Parent will have to pay Twitter a termination fee of $1.0 billion.
On the other hand, Twitter will owe Elon Musk a $1 billion severance fee if he fails because he found a competing offer or if shareholders reject the deal according to the same filing.
Musk offered to buy the company at $54.20 per share and take it private. He said Twitter should function as a digital public square that tolerates different viewpoints.
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