The history of integration and acquisition is replete with ruthless corporate aggressors, war of words and people trying to harden each other.
T. Boone Pickens, the oil tycoon who wreaked havoc in the 1980s, took small stakes in energy companies. Attacked the administration. And forcible sale of firms. Carl Icahn, active investor, stockholder and He threatened to remove his board If they do not agree to an agreement. And Robert Campio, a Canadian real estate investor known for buying engineering, was unafraid. Take legal action Against the companies that tried to divert his initiative.
Yet despite all these cut-through tactics, the bargaining world has never seen such a buyer Elon Musk.
In the weeks since Mr Musk, the world’s richest man, signed a 44 billion deal. To buy the social media service Twitter, it has upped the ante of the deal. Generally, when both parties agree to negotiate an acquisition, they spend weeks discussing financial matters and giving details. The operation takes place mostly behind closed doors, inside boardrooms and at reputable law firms and investment banks.
But Mr Musk reluctantly resigned to complete the Twitter deal, according to the legal filing. Since then, he has publicly criticized Twitter’s service – on Twitter, naturally – Attacked some of its top officials. And released satirical tweets on the company’s board. And with memes and a Pope EmojiHe has been seen on social media trying to renegotiate the deal.
In short, the 50-year-old Mr Musk has turned what was once a friendly agreement into a hostile occupation. His actions have left Twitter, regulators, bankers and lawyers worried about what he can do next and whether the blockbuster deal will be completed. And Mr. Musk has made the corporate raids of the past positively awkward in comparison.
“Elon Musk plays in his gray area – you can almost say in his own words,” said Robert Wolf, former US chairman of the Swiss bank UBS. “It’s definitely a new way of doing things,” he said.
Mr Musk did not respond to a request for comment.
On Thursday, Twitter executives told a company meeting that Mr Musk’s purchase was moving forward and that they would not discuss it again, according to two attendees who spoke on condition of anonymity. Earlier this week, the company’s board also announced, “We intend to close the transaction and implement the merger agreement.”
Twitter’s board has claimed that the agreement has legal supremacy. Except one 1 billion breakup feeThe agreement with Mr Musk includes a “specific performance clause” that gives Twitter the right to sue and force it to complete the agreement or pay it off, as long as it pays the debt. Financial support is maintained.
“He has signed a binding agreement,” said Edward Rock, a professor of corporate governance at New York University School of Law. “If these agreements are not enforceable, then this is a problem for every other agreement out there.”
Twitter did not respond to a request for comment.
Mr Musk has already pushed some legal limits. The Federal Trade Commission is examining whether the billionaire violated the disclosure requirements by failing to notify the agency. He had amassed a huge following on Twitter. Earlier this year, a person with knowledge of the inquiry said. Investors should generally notify no-confidence regulators of large stock purchases so that government officials are given 30 days to review transactions for competition violations.
The FTC declined to comment. Information, a tech news site, First reported On the FTC’s interest in Mr. Musk.
The pattern of rental corporate buyers has existed for decades. Jay GoldBarron, a late 19th-century bandit who helped build the American railroad network system, partially financed deals with his Wall Street gambling wealth. He strengthened the dying railroad and was known for spreading rumors in the press.
Mr. Gold, One of his biographers wrote Edward Reneehan Jr. was a “margins expert” who was able to use thin air to create capital from thin air and gain control over companies: convertible bonds, proxies and proxies. Home. Leveraged Cash. “
In the same decade, Mr. Campio used Buyout to create one. Retail empire That included Blooming Dale and Abraham & Strauss, who eventually Buckle Under the debt he imposed on them. A new type of enemy attacker also emerged – private equity firms – which employed the unarmed occupation tactics described in the memoir.Wild at the gateA 1989 book about the acquisition of private equity firm KKR and its RJR Nabisco.
How Elon Musk’s Twitter deal came to light
In recent years, deals that have broken down or been renegotiated are not uncommon. after the Sally MaiThe largest student lending company sold itself to a consortium of financial firms in 2007 for ڈالر 25 billion, the debt crisis erupted and new legislation threatened it. Finance. Buyers are likely to call everyone who looks appropriate, if there are only a few Attempt failed.
That same year, a 6.5 billion deal by Apollo Global Management – which owns a chemical company, Hexion – to its rival Huntsman – fell apart when Huntsman’s earnings plummeted and Sue everywhere. In 2016, telecom company Verizon cut its لیے 4.5 billion price tag for Yahoo’s Internet business. Yahoo revealed. He had suffered a major security breach.
Yet in many of these deals, the debatable “materially negative changes” – whether financial crisis or security breach – were behind the change in price or the cessation of acquisitions. This is no longer the case with Twitter and Mr Musk, where no clear element has emerged to try to change the format of the agreement. (Mr Musk, who has taken over the issue of the number of bots on Twitter, said he doubted the veracity of the company’s public filing.)
Mr. Musk appears to be free to customize the deal because of his extraordinary personal wealth, the total value of which About 0 210 billion And it allows it Ignore the economics of the contract.. And unlike a private equity firm, it doesn’t buy more than one public company a year, which makes it less important to present itself as a permanent close.
While Mr. Musk is accountable to the shareholders of other companies he runs – including the publicly traded car maker Tesla – those shareholders usually invest in his efforts because he is an inventor. Not because he’s a deal maker.
Anne Lipton, a professor of corporate governance at Toulin Law School, said most of the things that keep the world of integration and acquisition within limits are “known restrictions.” But Mr Musk, he noted, “does not care about the city’s restrictions.”
And it gives everyone an idea.
Mike Isaac And Cecilia Kong Cooperation reporting.