Twitter announced earlier this week that it would be holding a shareholder meeting to put the $44 billion acquisition of the social media platform by Elon Musk to a vote.
The meeting will take place on September 13th, ahead of the five-day court battle with the Tesla CEO, arranged to take place later this fall.
Why the Twitter Shareholder Meeting Matters
Approval of the proposal to adopt the merger agreement requires the affirmative vote of the majority of shareholders as a condition to the closing of the merger. Without it, a “governmental entity may prohibit, delay, or refuse to grant a necessary regulatory approve.”
“Adoption of the merger agreement by our stockholders is the only remaining approval or regulatory condition to completing the merger under the merger agreement and is an important and required step for our stockholders to receive the merger consideration,” Twitter said in a proxy filing with the US Securities and Exchange Commission.
What Happens If the Vote Doesn't Go Through?
According to the proxy filing, submitted to the SEC on behalf of Twitter's Board of Directors, Twitter stockholders who do not vote in favor the merger agreement will have the right to seek appraisal of the value of their shares of our common stock.
“Stockholders who do not vote in favor the merger agreement will have the right to seek appraisal of the “fair value” of their shares of our common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger and together with interest in lieu of receiving $54.20 per share in cash if the merger is completed.”
Elon Musk Isn't Happy
Musk announced the termination of the $44 billion Twitter acquisition earlier this month for what he claims to be the failure to provide the data requested regarding spam and fake accounts on the platform. In response, Twitter sued Elon Musk for violating the terms of their merger agreement.
Since the deal was brought into question, Twitter’s shares have dramatically fallen. Twitter argued that Musk's reasons for pulling out of the deal was just “buyer's remorse,” having agreed to pay 38% above Twitter's stock price shortly before the stock market and Tesla shares began to fall, causing Musk to lose approximately $100 billion.
A Delaware judge voted in favor of Twitter's request to not delay the trial, despite Musk's attempts, claiming that a delay could cause “irreparable harm” casting a “cloud of uncertainty” over the social media company's value.
The trial will take place in October.