NEW YORK (BLOOMBERG) - Twitter's board said it plans to enforce its US$44 billion (S$60.9 billion) agreement to be bought by billionaire Elon Musk, saying the transaction is in the best interest of all shareholders.
"We intend to close the transaction and enforce the merger agreement," the board said on Tuesday (May 17) in a statement to Bloomberg News.
Directors voted earlier to unanimously recommended that shareholders approve Mr Musk's US$54.20-a-share offer.
The proposed takeover includes a US$1 billion breakup fee for each party, which Mr Musk will have to pay if he ends the deal or fails to deliver the acquisition funding as promised. Mr Musk might be released from that requirement if he can show a material change in the company’s situation or the information it has provided.
The board's statement comes as Mr Musk appears to be manoeuvring to ditch or renegotiate his offer.
Mr Musk said last week that the deal was "on hold" until he gets more information, specifically proof from Twitter that so-called spam bots make up less than 5 per cent of its users.
On Monday, Mr Musk stoked speculation that he could seek to renegotiate the takeover, saying at a tech conference in Miami that a viable deal at a lower price wouldn't be "out of the question".
Twitter has said it is committed to completing the sale.
The shares, which had dropped for seven straight trading days, closed Tuesday up 2.5 per cent to US$38.32, still well below the offer price.
Mr Musk’s tweet last Friday that the deal was on hold came as a surprise to advisers on both sides who had no idea he might be having second thoughts, according to people familiar with the matter. Some advisers said they were trying to dismiss his tweets as “noise,” and advising colleagues to do the same, hoping that the world’s richest man is providing a form of entertainment rather than seriously reconsidering his plans.
The merger agreement includes a specific performance provision that allows Twitter to force Mr Musk to consummate the deal, according to a filing. That could mean, should the deal end up in court, that Twitter might secure an order obligating Mr Musk to complete the merger rather than winning monetary compensation for any violations of it.