Elon Musk and Twitter were sued on Friday by a Florida pension fund seeking to stop Musk from quickly completing his planned $44 billion takeover of the social media company.
In a complaint filed in Delaware Chancery Court, the Orlando Police Pension Fund said that under Delaware law Musk cannot complete the takeover until at least 2025 unless holders of two-thirds of shares not “owned” by him approved.
The lawsuit said Musk became an “interested stockholder” after taking a more than 9% Twitter stake, requiring the delay. Musk also runs electric car company Tesla and is the world’s richest person according to Forbes magazine.
Twitter and its board, including Chief Executive Parag Agrawal, are also defendants. The lawsuit seeks to delay the merger’s closing until at least 2025, declare that Twitter directors breached their fiduciary duties, and recoup legal fees and costs.
Twitter declined to comment. A lawyer for Musk did not immediately respond to a request for comment.
This isn’t the first time Mr. Musk’s planned takeover has been targeted in court. Last month, a group of Twitter shareholders sued Mr. Musk claiming that he failed to disclose his 9.2 percent stake in the company in the proper timeframe.
Federal law requires investors to inform the Securities and Exchange Commission about stakes exceeding 5 percent within 10 days of the purchase.
According to the earlier suit, Mr. Musk hit the 5 percent milestone on 14 March and thus needed to alert the SEC by 24 March. However, he did not do so until 4 April. Mr. Musk’s motive in buying all shares in the company to take it private has been the subject of much speculation for weeks.
The eccentric CEO has said he wants to protect free speech and improve transparency on the platform.
Earlier this week he denied reports that the takeover is the result of conversations with Donald Trump, who was banned from Twitter following the 6 January 2021 Capitol riots.
