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Where is your proof that he waived the opportunity to do any due diligence?

JumpCrisscross 4y ago
> Where is your proof that he waived the opportunity to do any due diligence? The merger announcement [1]. Consummation of the Merger is subject to approval by Twitter's shareholders and the U.S. government. No boilerplate diligence clause. That "the acquisition proposal was no longer subject to the completion of financing and business due diligence" was also cited by Twitter in its proxy statement [2]. [1] https://www.sec.gov/Archives/edgar/data/1418091/000119312522120474/d310843ddefa14a.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522... [2] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45a-163f-4cba-ad33-68ddc6063fc8.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45...
- sixQuarks 4y ago
  Read section 7.2 - obligations of company state that all of the public information of Twitter shall be true and correct. Elon is only trying to verify that the public filing is correct (b) (i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date
  - JumpCrisscross 4y ago
    MAE clauses are not diligence clauses. And in the history of M&A, it has been activated once, in 2017 [1], under circumstances very different from these. [1] https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker-Glover-Alterbaum-Evolution-of-the-material-adverse-effect-clause-Financier-Worldwide-06-2019-1.pdf https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker...
    - sixQuarks 4y ago
      We could go back and forth on this all day. The point is, there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information. We will see how the case plays out in court: ------- Twitter is obligated to provide, information and data for, inter alia, “any reasonable business purpose related to the consummation of the transaction” (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including by providing information “reasonably requested” by Mr. Musk (Section 6.11). Mr. Musk’s requests for user data not only satisfies both criteria, but also meets even Twitter’s narrowed interpretation of the merger agreement, as this information is necessary to facilitate the closing of the transaction.
      - JumpCrisscross 4y ago
        > there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information The proxy statement sent out with the merger agreement was signed off on by Musks's lawyers. Musk waived his diligence rights. This isn't a fact anyone informed about this is debating. Elon's legal team aren't idiots; they aren't arguing the diligence rights they waived are being denied or that an MAE occurred--both are predictably losing arguments. Instead, he's arguing that debt-finance facilitation line. The one you quote. That's not a diligence out. Nothing in the data would give him an excuse to kill the deal. But if he can get a lender to say they would have lent had they been given those data, and Twitter won't hand it over, he has an out. Again, not on the basis of the content of the data, but its provisioning per se.
        sixQuarks 4y ago
        OK, I will concede your point. Regardless, I do think Elon can get out of this deal without paying a penalty.
        JumpCrisscross 4y ago
        > I do think Elon can get out of this deal without paying a penalty There's a deal to be worked out. Elon is one of Twitter's biggest users. That's a boon and a curse for both sides.
bmitc 4y ago
It was reported on by several news outlets. As I mentioned, it was my understanding based upon these reports. I did some research and found this statement from Twitter’s Schedule 14A proxy statement filed on May, 17, 2022: > Mr. Musk also disclosed that his acquisition proposal was no longer subject to the completion of financing and business due diligence. https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45a-163f-4cba-ad33-68ddc6063fc8.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45... https://investor.twitterinc.com/financial-information/sec-filings/default.aspx https://investor.twitterinc.com/financial-information/sec-fi...

> Where is your proof that he waived the opportunity to do any due diligence? The merger announcement [1]. Consummation of the Merger is subject to approval by Twitter's shareholders and the U.S. government. No boilerplate diligence clause. That "the acquisition proposal was no longer subject to the completion of financing and business due diligence" was also cited by Twitter in its proxy statement [2]. [1] https://www.sec.gov/Archives/edgar/data/1418091/000119312522120474/d310843ddefa14a.htm https://www.sec.gov/Archives/edgar/data/1418091/000119312522... [2] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45a-163f-4cba-ad33-68ddc6063fc8.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45...

sixQuarks 4y ago
Read section 7.2 - obligations of company state that all of the public information of Twitter shall be true and correct. Elon is only trying to verify that the public filing is correct (b) (i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date
- JumpCrisscross 4y ago
  MAE clauses are not diligence clauses. And in the history of M&A, it has been activated once, in 2017 [1], under circumstances very different from these. [1] https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker-Glover-Alterbaum-Evolution-of-the-material-adverse-effect-clause-Financier-Worldwide-06-2019-1.pdf https://www.gibsondunn.com/wp-content/uploads/2019/06/Becker...
  - sixQuarks 4y ago
    We could go back and forth on this all day. The point is, there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information. We will see how the case plays out in court: ------- Twitter is obligated to provide, information and data for, inter alia, “any reasonable business purpose related to the consummation of the transaction” (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including by providing information “reasonably requested” by Mr. Musk (Section 6.11). Mr. Musk’s requests for user data not only satisfies both criteria, but also meets even Twitter’s narrowed interpretation of the merger agreement, as this information is necessary to facilitate the closing of the transaction.
    - JumpCrisscross 4y ago
      > there is no hard and set clause that says Musk waived all his due diligence rights or right to verify any information The proxy statement sent out with the merger agreement was signed off on by Musks's lawyers. Musk waived his diligence rights. This isn't a fact anyone informed about this is debating. Elon's legal team aren't idiots; they aren't arguing the diligence rights they waived are being denied or that an MAE occurred--both are predictably losing arguments. Instead, he's arguing that debt-finance facilitation line. The one you quote. That's not a diligence out. Nothing in the data would give him an excuse to kill the deal. But if he can get a lender to say they would have lent had they been given those data, and Twitter won't hand it over, he has an out. Again, not on the basis of the content of the data, but its provisioning per se.
      - sixQuarks 4y ago
        OK, I will concede your point. Regardless, I do think Elon can get out of this deal without paying a penalty.
        JumpCrisscross 4y ago
        > I do think Elon can get out of this deal without paying a penalty There's a deal to be worked out. Elon is one of Twitter's biggest users. That's a boon and a curse for both sides.

bmitc 4y ago

It was reported on by several news outlets. As I mentioned, it was my understanding based upon these reports. I did some research and found this statement from Twitter’s Schedule 14A proxy statement filed on May, 17, 2022: > Mr. Musk also disclosed that his acquisition proposal was no longer subject to the completion of financing and business due diligence. https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45a-163f-4cba-ad33-68ddc6063fc8.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/ee07b45... https://investor.twitterinc.com/financial-information/sec-filings/default.aspx https://investor.twitterinc.com/financial-information/sec-fi...