Twitter‘s board of directors has recommended that shareholders approve its proposed $44-billion sale to Tesla CEO Elon Musk, according to a regulatory filing Tuesday. It comes days after Musk in a letter threatened to walk away from the takeover deal if the social media network failed to provide data on spam and fake accounts.
In a filing with the US Securities and Exchange Commission on Tuesday, Twitter’s board of directors said that it “unanimously recommends that you vote (for) the adoption of the merger agreement”. If the deal were to close now, investors in the company would pocket a profit of $15.22 for each share they own, according to an AP report.
Earlier, in a recent letter filed with regulators, Elon Musk has said he was entitled to conduct his own survey of spam accounts, as he believes that there are more than 5 per cent of bot accounts on Twitter as reported by the microblogging site.
“As Twitter’s prospective owner, Mr Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model – its active user base,” Musk’s lawyer Mike Ringler said in the letter.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence in particular, Mr Musk believes the company is actively resisting and thwarting his information rights,” said the letter. “This is a clear material breach of Twitter’s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” it added.
Twitter later responded to Musk’s letter by saying that it would cooperatively share information with the Tesla CEO. “Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement,” read the statement.
Twitter Chief Executive Parag Agrawal last month tweeted he did not believe a calculation of fake and spam accounts could be performed outside the company, because it would require private information that Twitter cannot share.
“We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” it added. Closing of the transaction has always been highlighted by Twitter, as its current CEO Parag Agrawal had indicated earlier in a series of tweets, following Musk’s declaration of putting the deal on hold. “While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter. I’m accountable for leading and operating Twitter, and our job is to build a stronger Twitter every day,” he had said in the tweet in May 14.
According to a recent Reuters report, Twitter anticipates a shareholder vote on its $44-billion sale to Elon Musk could come by early August, as it continues to work constructively to complete the deal with the world’s richest person.