Critical Analysis of Elon Musk’s takeover of Twitter

Abstract

According to the latest news, Musk completed the acquisition of Twitter on 27 October, which is a foreseeable result of this paper. This paper will critically discuss how the parties of this deal achieved their results, terminating the transaction for Musk and continuing the trade for Twitter by reviewing the agreements' representations, warranties, and covenants, MAC, the case of Snow Phipps Group v KCAKE and Verizon v Yahoo acquisition, will be referred. Musk previously would like to terminate the transaction because Twitter has provided false statements despite Musk skipping the due diligence (business/finance, legal/regulatory, environmental, and other areas of the target company) of the acquisition of Twitter. Then, Musk added the whistleblower’s allegation about Twitter’s security holes to the list of reasons for the deal's termination. The intention of ending might be that Musk would purposely reduce his offer price from $44 billion to a lower price by threatening to cancel the acquisition if Twitter permitted the transaction to proceed in subsequent negotiations if Twitter is liable for breach of representations and warranties. As for the acquisition agreement's covenant, the essence of the deal is access rights, which allowed Musk to acquire additional information after the contract closing, and Twitter had performed its obligations under the agreement. As last, Twitter argues that the market decline did not trigger the MAC clause. Therefore, the deal should proceed as planned.