A major Twitter shareholder is taking legal action to prevent the multi-billionaire Elon Musk from completing his W$44 billion buyout of social media platform Twitter.
The legal action is taken by Florida Orlando Police pension fund in a class action filed in Delaware Chancery Court.
The claim alleges that Delaware law forbade a quick merger because Musk had agreements with other big Twitter shareholders, including his financial adviser Morgan Stanley and Twitter founder Jack Dorsey, to support the buyout.
The Police Pension fund said those agreements effectively made Musk the owner of the more than 15 per cent of the Twitter shares. he owns 9.6 per cent of the company stock. It said that required delaying the merger by three years unless two-thirds of shares not “owned” by him granted approval.
Elon Musk hopes to complete his $54.20 per share Twitter takeover this year to add to his portfolio of high-value, high tech investments, which include Tesla Inc, The Boring Co and SpaceX, propelling him to the top of Forbes Richest Person list. The Twitter purchase is one of the largest leveraged buyouts in the world.
The lawsuit also seeks to declare that Twitter directors breached their fiduciary duties, and recoup legal fees and costs. It did not make clear how shareholders believed they might be harmed if the merger closed on schedule.
On Thursday, Musk said he had raised around $7 billion, including from sovereign wealth funds and friends in Silicon Valley, to help fund a takeover.