A Florida pension fund has sued Tesla CEO Elon Musk and Twitter Inc. in a bid to halt the self-avowed "free speech absolutist" from finalizing his $44 billion takeover bid of the social media platform.
In the proposed class-action lawsuit, brought by the Orlando Police Pension Fund and filed in Delaware Chancery Court, the plaintiffs claim that Musk cannot legally finalize his takeover until at least 2025 unless holders of two-thirds of shares not owned by him sign off on the deal.
The complaint claims that Delaware law prohibits a quick takeover because Musk has agreements with other big Twitter shareholders to support the buyout, including Twitter founder Jack Dorsey and Musk's financial adviser Morgan Stanley. Dorsey owns 2.4 percent of Twitter shares while Morgan Stanley owns around 8.8 percent.
When Musk took a 9 percent stake in Twitter, he became an "interested stockholder" and his takeover bid requires the delay, the lawsuit claims.
Besides Musk, the lawsuit also names the Twitter board as defendants.
'Inclusive Arena for Free Speech'Musk, who is the world's wealthiest individual, according to Forbes, has sought to buy Twitter in a deal estimated to be worth around $44 billion.
The group of investors includes a Saudi prince and Oracle co-founder Larry Ellison, who has agreed to invest $1 billion. The biggest contribution is to come from Saudi Prince Alwaleed bin Talal, a billionaire and one of Twitter's largest stockholders, who has pledged $1.9 billion.
Twitter has accepted Musk’s proposal of $54.20 per share in cash, putting its value at around $44 billion.
Some of the changes Musk has teased include cracking down on spam bots, making the algorithm open source to bolster transparency, and generally shifting the content moderation policies towards erring on the side of more free speech.