Twitter has demanded its “day in court” after Elon Musk asked a judge to halt an upcoming trial over his $44bn deal to buy the company.
In another day of drama for the Twitter takeover saga, Musk’s lawyers revealed that a last-ditch bid by the Tesla chief executive this week to acquire Twitter after all – and avert legal proceedings – had foundered.
After spending months in a high-stakes court battle to get out of his April agreement to buy the social media company, Musk reversed course on Monday and offered to close the deal at the original price of $54.20 per share.
However in a filing to the Delaware court that will hold the trial, Musk’s lawyers said: “Twitter will not take yes for an answer.”
“Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests.”
In response, Twitter said Musk’s surprise proposal to close the deal included unacceptable clauses and was an “invitation to further mischief and delay”.
“Until defendants commit to close as required, Twitter is entitled to its day in court,” said the company’s legal representatives. Referring to Musk’s previous abandoment fn the deal, the Twitter filing said Musk was saying “‘Trust us … ‘we mean it this time’”.
The five-day trial regarding the deal is scheduled to begin in Delaware, where Twitter is incorporated, on 17 October.
In a filing at the Delaware court of chancery, Musk’s representatives had argued the deal could close on or about 28 October without a trial. The alternative, it added, is a deal-closing process that could take months – even if the trial goes ahead and Twitter wins.
Musk’s representatives argued in the filing that they have done “exactly” what Twitter has asked by offering to close the deal on the agreed terms.
It added: “Proceeding toward trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction.”
The filing claimed that Twitter was refusing to accept a pause in the 17 October trial based on a “theoretical failure” to obtain the $12.5bn in debt financing for the deal.
It said the lenders were “prepared to honor” their obligations and accused Twitter of “baseless speculation” about the financing package. However, the document does refer to the “much less likely possibility” of the debt not being funded.
In its response, Twitter said it was not refusing to take yes for an answer. It said the obstacle to putting off the trial was that Musk is still refusing to accept his “contractual obligations”. Twitter said that as part of his renewed offer the Tesla CEO was asking to reserve the right to resurrect a lawsuit against the company if the closing does not happen.
The company added that one of the banks in the consortium lending Musk $12.5bn said it had yet to be told by him that he intends to close the deal.
Brian Quinn, a professor at Boston College law school, said: “I think it says a lot about the lack of trust between the parties at this point. Clearly, Twitter doesn’t believe Musk will actually follow through and wants to keep the pressure on.”
Twitter is determined to give Musk no wriggle-room, said Howard Fischer, a partner at New York law firm Moses & Singer.
“Twitter, quite reasonably, is concerned that if the trial is put off and the closing is set for some date thereafter, Musk will pull the rug out from under them, and continue to play for time.”
Shares in Twitter closed down 3.8% at $49.39.
