Elon Musk’s $44 billion Twitter takeover challenged in lawsuit

Elon Musk and Twitter were sued on Friday by a Florida pension fund looking to stop the world’s richest man from completing his $44 billion acquisition of Twitter before 2025.

According to Reuters, the Orlando Police Pension fund has filed a proposed class action lawsuit in Delaware Chancery Court, claiming that Delaware law prevents a quick sale as Musk had agreements with other large Twitter shareholders such as Morgan Stanley, his financial advisor, and founder Jack Dorsey to support the takeover.

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The lawsuit claims that Musk’s agreements with Morgan Stanley and Dorsey make him the effective “owner” of more than 15% of Twitter’s shares: the 50-year-old billionaire himself owns a 9.6% stake, while Morgan Stanley and Dorsey own 8.8% and 2.4% respectively.

According to the lawsuit, since Musk owns more than 15% of Twitter, Delaware law prevents him taking over the company before a period of three years. If, however, Musk wants to acquire Twitter, Delaware law stipulates that the sale has to be agreed to by at least two-thirds of the owners of the remaining shares of the company.

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The lawsuit, which named Musk, Dorsey, and Twitter as defendants, did not clarify how shareholders would be affected if Musk achieved his goal of acquiring Twitter this year instead of three years later.

Reuters reported that Twitter had declined to comment, while lawyers for Musk and the Orlando Police Pension fund could not be reached for comments.

Musk, a self-declared ‘free speech absolutist‘, the world’s richest person, and the founder of SpaceX, Tesla, and the Boring Company, announced his decision to acquire Twitter for $44 billion last month, after weeks of speculation about an impending takeover.

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In late-April, Twitter agreed to the deal, thereby making the impending acquisition one of the largest leveraged buyouts in history.

The 50-year-old is currently in the process of arranging funds for the acquisition, and expects to complete it by the end of this year.