Twitter Sets up A Legal Team in Order to Sue Musk over A Dropped Takeover

Although the advisory fees will be paid by the banks, the majority of the fees are only payable if the deal is closed. According to Insider, bankers are eager to see Musk and Twitter get together.

To support Musk’s acquisition, Morgan Stanley, BofA and Barclays, MUFG. BNP Paribas. Mizuho. Societe Generale. This debt was to be taken from banks’ balance sheets and syndicated with third-party investors as high-yield bonds, or leveraged loans.

If the deal is canceled by both sides, it could result in a collective “nine-figure” payday for all banks involved. This was according to Insider.

A banker from another firm participated in the financing of the debt, and said that the process was not over for the acquisition. Musk could lose in a long-running legal process, he says.

The billionaire is facing a legal nightmare. 

Twitter is vowing that it will sue Musk to force a deal to close. To void the Twitter purchase, Musk must argue that there was a material adverse impact on the transaction. However, courts are not known to favor apprehensive buyers and courts seldom rule in their favor.

Musk would have to pay $1 billion to Twitter as a termination fee for ending the deal. Twitter can force Musk to close the deal if the court finds other conditions are met — including financing.

It took Morgan Stanley just six days to coordinate the syndicate banks in order to support Musk’s $44 Billion takeovers of Twitter.

Insiders learned that Musk signed a deal without considering Twitter’s financials and dismissed the company’s inability to generate cash flow. This move led to some lenders refusing to participate in the financing.

However, when Musk is around, banks can move mountains to get him what he needs, especially if this work could land them Musk’s next big deal.

He is a billionaire. He is the effective owner of Tesla, an electric vehicle manufacturer worth $780 billion. The company participates in capital markets. He also owns SpaceX. If the space company goes public, it’s something Wall Street banks will want to be a part of.

The first senior banker stated, “Here’s a thing, when your wealth is great, you can play around with anybody and people will return to you.” It’s not surprising that the banks will be unhappy about this, but they will likely be there for the next deal. This is the nature of trade.

Bankers hope the deal will be approved, as Musk and Twitter are likely to appear in court. It will be a large fee in a year otherwise difficult for capital markets and M&A.