On Tuesday (April 26), local time, filings filed with U.S. securities regulators from social media giant Twitter showed that if the company terminated the $44 billion acquisition agreement signed by Elon Musk, it would be required to pay $1 billion in liquidated damages in specific circumstances, of course, in turn, if Musk terminated the transaction, he would also need to pay the same amount of fees. It seems that in order to avoid this sky-high liquidated damages, this contract was signed.
"If parent (referring to the company created by Musk to acquire Twitter) and the acquired subsidiary are met to complete the obligations of the merger, and the parent company does not complete the merger in accordance with the requirements of the merger agreement, including because equity, debt or margin loan financing is not in place, Parent will be required to pay Twitter a fee of $1 billion."" ”
At the same time, the filing also stipulates that if Twitter accepts a competitor's takeover offer, or if shareholders reject the deal, the company will need to pay Musk a fee of $1 billion.
An interesting note in the full merger agreement and plan is that Musk is usually allowed to tweet about the deal, as long as such tweets don't discredit the company or any of its representatives.
It is worth mentioning that given that Twitter will become private after the completion of the transaction, the document also includes details about the change in Twitter's employee equity plan. Employee stock rewards will continue to be awarded until the transaction is completed, but any unsentized stock rewards will be canceled and employees will be entitled to cash rewards when these rewards expire, the documents said.