Tesla CEO Elon Musk may be required to pay a $1 billion termination fee to Twitter if it fails to secure sufficient funding To buy a social media company for $44 billion in cashAccording to a filing by the US Securities and Exchange Commission.
And the disclosure published by CNBC and seen by Al Arabiya.net stated, “If it fails to meet the terms of the parent company’s obligations – in reference to the companies that Musk recently established under the name “X Holings” to acquire Twitter – debt and subsidiaries to acquire and complete the merger as required by the merger agreement, including due to non-equity, debt and/or margin loan financing, the takeover offeror will be required to pay Twitter a $1 billion termination fee.
Musk offered to buy the company at $54.20 per share and turn it into a private company.
Twitter had said Monday that Musk had secured $25.5 billion in debt and equity financing, and had pledged to repay $21 billion in debt in the form of stock.
The disclosure said that Twitter would have to pay the same fine if it abandoned the agreement under certain circumstances.
The disclosure also revealed that the deal could be canceled if it is not closed by October 24.
The date can be extended by another six months to meet certain conditions for its closure, such as anti-monopoly permits and foreign investment.
Musk, who is also the CEO of electric car maker Tesla, reached an agreement on Monday to buy Twitter in a deal. You will put the world’s richest man in control of the social media platform Which includes millions of users and global leaders.