The Musk-Twitter endgame

Musk has a contractual obligation to buy Twitter at the agreed price, and he can certainly afford to do so.

A lot of attention has focused on the $1 billion termination fee in the short-form merger agreement. Fewer people have looked at the section on “specific performance” in the long-form merger plan that basically says: “If you try to back out of this, we can take you to court in Delaware, and the court will force you to buy the company at the agreed price.”

Between the lines: Such language is particularly germane in cases like this, where the buyer has the ability to pay in full. (Even if he has to sell a large chunk of Tesla stock to get the cash he needs.)

The key precedent is IBP Inc. v. Tyson Foods Inc, with Don Tyson of Tyson Foods playing the role of Elon Musk. He tried to back out of an agreed acquisition of IBP, but in 2001 was forced to buy the company anyway by the Delaware Chancery Court.