The banks that agreed to finance Elon Musk's $44 billion acquisition of Twitter Inc have a financial incentive to help the world's richest person walk away but would face long legal odds, according to people close to the deal and corporate law experts.
Yet there is one scenario in which Musk would be allowed to abandon the acquisition by paying Twitter only a $1 billion break-up fee, according to the terms of their contract. His $13 billon bank financing for the deal would have to collapse. They also face the prospect of hundreds of millions of dollars in losses if Musk is forced to complete the deal, the sources said. This is because, as with every big acquisition, the banks would have to sell the debt to get it off their books.
The banks are waiting for the outcome of the legal dispute between Musk and Twitter before making any decisions, according to the sources. The trial is scheduled to start in October. This would be challenging to prove given Musk's public statements against the deal as well as private communications between Musk and the banks that Twitter may uncover in its request for information, four corporate lawyers and professors interviewed by Reuters said.
Source: News Formal (newsformal.com)
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