Shareholders of Twitter Inc on Tuesday approved a $44 billion takeover proposal from billionaire Elon Musk. Whether the deal can be completed will now be decided by a trial next month. A majority of Twitter shareholders voted in favor of accepting Musk's $54.2-a-share takeover offer, according to preliminary voting results released on Tuesday. Musk made a takeover offer to Twitter in April, but has since tried to reverse the deal. Twitter's board, along with two prominent consulting firms, had encouraged investors to approve the deal. Shares in the company were little changed after the vote, closing at $41.74, well below Musk’s proposed offer.
Twitter said 98.6 percent of shareholders voted in favor of the deal. Musk, Twitter's largest shareholder, didn't vote at all, according to two people familiar with the matter. When Musk agreed to buy Twitter, he owned more than 73 million shares in the company or nearly 10 percent.
While the deal needs to be approved by investors, its eventual completion is far from a certainty. Musk said in July that he would cancel the agreement, citing Twitter misleading him about the size of the company's user base, the number of bots, and spam accounts. Twitter has denied the allegations and is suing Musk in a Delaware court to force him to complete the acquisition. Musk then countersued Twitter.
Lawyers for Musk and Twitter have been arguing over witnesses, evidence, and even a court date for weeks. The trial will be held in Delaware Chancery Court on October 17. From a Twitter perspective, a shareholder vote to approve the deal is all Musk needs to move the deal forward. Musk disagreed with that claim and asked the company to disclose more information. Musk recently tried to back up his views by citing a whistleblower's revelations. Twitter's former security chief, Peiter Zatko, claimed the company violated multiple regulatory requirements, and lax security measures and provided misleading information about the number of bots on its service.