Elon Musk suggested delaying his $44 billion (€44 billion) takeover of Twitter on the grounds that it “wouldn’t make sense to buy Twitter if we’re heading into world war three”, according to texts between the billionaire entrepreneur and his bankers revealed in a court hearing.
During a three-hour session in a Delaware Chancery court on Tuesday, the social media company shared a message exchange between Mr Musk and Morgan Stanley banker Michael Grimes, as it sought to argue that the billionaire’s continued attempts to back out of the deal citing concerns over bots were “all pretext”.
According to the exchange dated May 8th – several weeks after Mr Musk had agreed to buy the platform for $54.20 a share, and two months into Russia’s invasion of Ukraine – the Tesla chief executive wrote: “Let’s slow down just a few days. [Vladimir] Putin’s speech tomorrow is extremely important.”
“It won’t make sense to buy Twitter if we’re heading into world war three,” he added, a sentence that the social media group’s lawyers described as the “money quotation”.
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The revelations come as the legal battle between Mr Musk and Twitter escalates, with both parties requesting dozens of subpoenas of investors, bankers and others involved in the deal, and arguing that the other party has not been co-operative in the discovery process.
Twitter argued Mr Musk’s attempt to pull out of the deal is motivated by protecting his financial interests as stock markets cool, rather than any valid concerns over bots.
Tuesday’s wide-ranging hearing, in front of chancellor Kathaleen McCormick, also covered Mr Musk’s request to amend his lawsuit so he could update it with the claims of a former Twitter executive turned whistleblower, who alleged last month that the company had misled regulators and investors about its user security practices.
Mr Musk had asked to delay the five-day trial scheduled for October 17th for a few weeks to revise his lawsuit and conduct further discovery.
Lawyers for Twitter dismissed Mr Musk’s efforts to delay the buyout as “an expensive and gruelling fishing expedition”, arguing the accusations from Peiter Zatko, the former head of security at Twitter, could not meet the legal standard to nullify the merger contract even if they were true.
Twitter conceded Mr Zatko raised concerns earlier this year about cybersecurity practices to senior executives. However, lawyers said these were investigated internally and “found to be without merit”.
Mr Musk’s lawyers accused Twitter of blaming the billionaire for its own misconduct, arguing that it had the right to seek out further information on the matter. Limited due diligence ahead of agreeing to a transaction is “what Warren Buffett does when he buys public companies”, Mr Musk’s lawyers argued. “Nobody seems to give Warren Buffett the same reaction when he does it.”
Separately, Twitter had also asked the court for Mr Musk to be sanctioned for delays in producing text messages, which it said amounted to misconduct.
The platform had also asked the Delaware court to force Mr Musk to turn over his emails with lawyers that he wrote using Tesla and SpaceX accounts, which they said were not subject then to the attorney-client privilege.
Both Twitter and Mr Musk acknowledged the intensity of the preparation for an October trial, which has included dozens of subpoenas and information requests as well as depositions that have begun.
Ms McCormick did not immediately rule on any of the matters.
– Copyright The Financial Times Limited 2022
