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According to a Thursday court filing, a Delaware judge halted Twitter Inc’s lawsuits against Elon Musk on the eve of trial to give the billionaire time to finance his $44 billion handover of the social media platform. The litigation was stalled until Oct. 28 at 5 p.m. EDT to allow Musk, the CEO of electric car maker Tesla Inc, to finance the transaction. Judge Kathaleen McCormick stated that if the deal did not close by her deadline, the sides were to contact her to schedule a November trial. Musk was supposed to go on trial on Oct. 17, but his deposition on Thursday was delayed by mutual agreement.
Investors appeared to be relieved that the order would put an end to several days of uncertainty about the status of the deal.
Twitter shares, which ended the day down 3.7%, rose 2.7% in after-hours trading.
The world’s richest person said this week that he would buy Twitter for the $54.20 per share price agreed upon in April, but that the deal would be contingent on debt financing.
That was a U-turn for Musk, who had spent months battling Twitter to get out of the deal. He claimed, among other things, that Twitter misled him about the number of real users on its platform.
Musk said in a court filing on Thursday that banks are cooperating to fund the deal, but that he needed more time, arguing that a brief delay was still preferable to the months it really would take to go through a trial and appeal.
According to Twitter, Musk should have to close next week, and a corporate representative for a lending institution testified on Thursday that Musk has yet to send them a borrowing notice and has not communicated his intention to close.
Major banks that committed to fund $12.5 billion, or roughly 28% of the deal, could face significant losses as the rapid pace of interest rate hikes has increased market volatility and dampened appetite for leveraged financing.
Musk has raised $15.4 billion this year by selling Tesla shares and is relying on large investors for a portion of the funding, raising speculation about whether he will sell more of the battery powered maker’s stock to fund the deal.
