Musk’s Twitter deal is his least bad option – but he must repair the damage he’s done

theguardian.com:

Elon Musk was always going to struggle to win in Delaware. He had signed a binding agreement to buy Twitter for $44bn and to make his “reasonable best efforts” to complete the deal. Saying he didn’t want to buy it any more wasn’t going to work in Delaware, the state where Twitter is incorporated and one that carries a reputation for making sure agreed company transactions happen.

And so it appears that Musk has chosen the least bad option, which is going ahead with the deal before spending millions more dollars trying to convince a judge that he should be allowed to walk away even though he had no grounds to do so.

Twitter’s response to Musk’s formal offer to complete the deal is to the point: it intends to close the deal at $54.20 per share, as it always has done. It just won’t have to go to court to finalise the obvious – that Musk has to complete a deal he signed up to with minimal due diligence.

Brian Quinn, a professor at Boston College law school, says Musk was choosing the cleanest outcome. The discovery process, which is a pre-trial phase of a lawsuit where both parties disclose information and documents to each other, did not yield up any solid evidence that Twitter had suffered a “company material adverse effect”, which would substantially alter the value of the business and allow Musk to walk away.

“Certainly, the discovery process didn’t turn up any of the potential smoking guns that would have been necessary for him to win, so it was very unlikely that he would win on the merits,” says Quinn. “So, while not necessarily inevitable, this outcome is likely the best way to finish this cleanly.”

Quinn adds that if there is a “stay” in legal proceedings – as referred to in Musk’s letter – then Twitter could relaunch