Orlando, May 8 (BUS): A Florida pension fund is suing Elon Musk with the aim of preventing Musk from completing his $44 billion acquisition of the social media company before 2025.
In a class action filed in Delaware Chancery Court, the Orlando Police Retirement Fund said Delaware law prohibits the rapid merger because Musk had agreements with other large Twitter shareholders, including his financial advisor Morgan Stanley (and Twitter founder Jack Dorsey, to support the takeover. .
Those agreements made Musk, who owns 9.6% of Twitter, the actual “owner” of more than 15% of the company’s shares, Reuters reported.
It said that would require postponing the merger for three years unless two thirds of the non-“owned” shares agreed to it.
Morgan Stanley owns about 8.8% of Twitter stock and Dorsey owns 2.4%.
Musk hopes to complete a $54.20-per-share acquisition of Twitter this year, in one of the world’s largest leveraged acquisitions.
He also runs electric car company Tesla Inc (TSLA.O), leads The Boring Co and SpaceX, and is the world’s richest person according to Forbes magazine.
Twitter and its board of directors, including Dorsey and CEO Parag Agrawal, have also been named as defendants.
Twitter declined to comment. Lawyers for Musk and the Florida Fund did not immediately respond to requests for comment.
The lawsuit also seeks to declare that the Twitter administrators have breached their fiduciary duties, and to recover fees and legal costs. It did not explain how shareholders believed they might be harmed if the merger closed on schedule.
On Thursday, Musk said he had raised about $7 billion, including from sovereign wealth funds and friends in Silicon Valley, to help fund the acquisition.
Musk had no financing when he announced plans to buy Twitter last month.
Some new investors seem to share interests with Musk, who describes himself as a free speech supporter who could change how the San Francisco-based company modifies content.
The Florida State Pension Fund is also investing in Twitter, and Governor Ron DeSantis said this week that it could turn a profit of $15 million to $20 million if Musk completes his purchase.
In afternoon trading, Twitter shares were down 60 cents at $49.76.
The case is the Orlando Police Retirement Fund v. Twitter Inc et al., Delaware Chancery Court, No. 2022-0396.