July 19, 2022

Busted Deals: It Isn’t Just Twitter. . .

Elon Musk apparently has had a lot of company over the past couple of months when it comes to trying to wiggle out of a deal.  According to a recent analysis by Bloomberg Law’s Grace Maral Burnett, deal terminations have spiked in the last two months:

Last month, 48 controlling-stake global M&A deals (deals for control of the assets or entity to be acquired, e.g., buyouts, takeovers) were terminated, marking the highest monthly count of terminated controlling-stake deals since June 2020. And for all categories of deals combined—including spin-offs, joint ventures, venture capital financing rounds, and other minority stake investments—June’s total of 61 terminated deals marked the highest monthly termination count since November 2021.

To date, July has seen 21 terminations of controlling-stake deals, including the largest—and arguably one of the most drama-filled—deal terminations of the year: Elon Musk’s teetering $44 billion buyout of Twitter Inc.

Overall, the year hasn’t shaped up too badly thus far – Grace’s analysis says that the number of deal terminations for the year are roughly about the same as last year. On the other hand, the dollar volume of busted deals has surpassed that of the same period during 2020.

Speaking Musk & Twitter, here’s a copy of Musk’s filing opposing Twitter’s motion to expedite the proceedings and here’s a copy of Twitter’s latest filing in response. There is a hearing at 11:00 am eastern this morning in front of Chancellor McCormick addressing Twitter’s motion.  Unfortunately, the Chancellor recently tested positive for COVID-19, so the meeting will be held via Zoom. This info comes from the Chancery Daily’s Twitter feed, which has all sorts of other details on the hearing.  You can access a live audio feed of the hearing by dialing (774) 267-2687.

John Jenkins