Musk and Twitter sued by the Florida pension fund for the acquisition of 44,000 million dollars | social media news

The Orlando Police Pension Fund argues that the deal cannot close before 2025 because Musk was an “interested shareholder” in the social media platform.

Elon Musk’s $44 billion purchase of Twitter Inc. was challenged in a lawsuit by a Florida pension fund that argues the deal can’t close before 2025 because Musk was an “interested shareholder” in the platform. social networks.

The Orlando Police Pension Fund filed suit in the Delaware Court of Chancery on Thursday. According to the complaint, Musk had agreements with other major Twitter shareholders, including founder Jack Dorsey, to trust his holdings when he offered to take the company private last month. Those arrangements triggered a Delaware law that requires a three-year delay in closing such deals, the fund says.

Musk’s acquisition of Twitter features one of the largest leveraged buyout deals in history. He is taking public a 16-year-old social media platform that has become a center of public discourse and a flashpoint in the debate over free speech online. Musk revealed on Thursday that a group of investors was putting up more than $7 billion of capital for the deal. They include Oracle Corp. billionaire Larry Ellison, venture capital firm Sequoia Capital and cryptocurrency exchange Binance Holdings Ltd.

A representative for Musk did not immediately return an email seeking comment on the pension fund lawsuit.

Musk, 50, has outlined financing for the deal that includes $13 billion in bank loans guaranteed by the social media company and $12.5 billion backed by a promise from part of his $170 billion stake in Tesla Inc. He is currently the richest person in the world, with a fortune valued at more than 249,000 million dollars.

The pension fund’s lawyers point out that Musk owned about 10% of Twitter shares when he made his takeover offer. They also say in the complaint that he had an “agreement, arrangement, or understanding” with other major Twitter investors, including Dorsey and investment bank Morgan Stanley. Those deals allowed Musk to rely on his actions and his support for the deal, according to the suit.

Under Delaware corporate law, those deals make Musk an “interested shareholder” who has to wait three years to close the deal or win the support of investors who control “at least 66 2/3% of the shares with Twitter’s outstanding voting rights” and were independent of the billionaire, the suit said.

The fund is asking a Delaware judge to determine that Musk meets the “interested shareholder” test and is subject to the law, according to the complaint.

The case is Orlando Police Pension Fund v. Twitter Inc, No. 2022-0396, Delaware Chancery Court.

(Updates with details of the lawsuit from the fifth paragraph)

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