Exclusive: Musk's Material Adverse Effect Not 'An Option For Him Walking Away': Merger Expert Tells Benzinga What's Next

Elon Musk disclosed Friday after market close that he was terminating his agreement to acquire social media platform Twitter Inc (NYSE: TWTR ). With shares of Twitter falling Friday on the news, Benzinga asked a merger expert what happens next and if the Tesla Inc (NASDAQ: TSLA ) CEO can truly walk away from his definitive agreement. Merger Terminated: Musk announced he was terminating the merger with Twitter due to the company breaching the agreement and a material adverse effect. “I don’t consider this an option for him walking away,” Accelerate’s Julian Klymochko told Benzinga. “He can claim he is terminating the merger agreement, however, it is extremely likely that the Board of Directors of Twitter will disagree with the purported termination and sue for specific performance.” Klymochko, who estimates that he has invested in/analyzed over 2,500 mergers over the last 15 years, told Benzinga previously that Musk can not walk away from the deal. What Past History Says: Klymochko pointed to past history showing that Musk’s case for a material adverse effect is unlikely to succeed. “Terminating a merger deal based on a MAE is extremely difficult, and has only happened once in history (Acorn v. Fresenius ). This successful MAE-based merger termination occurred after the target’s business completely fell apart,” ... Full story available on Benzinga.com