Elon Musk and Twitter were sued on Friday by a Florida pension fund seeking to stop Musk from completing his $44 billion takeover of the social media company before 2025.
In a proposed class action filed in Delaware Chancery Court, the Orlando Police Pension Fund said Delaware law forbade a quick merger because Musk had agreements with other big Twitter shareholders, including his financial adviser Morgan Stanley and Twitter founder Jack Dorsey, to support the buyout.
The fund said those agreements made Musk, who owns 9.6% of Twitter, the effective “owner” of more than 15% of the company’s shares. It said that required delaying the merger by three years unless two-thirds of shares not “owned” by him granted approval.
Musk hopes to complete his $54.20 per share Twitter takeover this year, in one of the world’s largest leveraged buyouts.
Related: Musk’s $44 Billion Twitter Buyout Under Antitrust Review
He also runs electric car company Tesla, leads The Boring Co and SpaceX, and is the world’s richest person according to Forbes magazine.
Twitter and its board, including Dorsey and Chief Executive Parag Agrawal, were also named as defendants. The lawsuit also seeks to declare that Twitter directors breached their fiduciary duties, and recoup legal fees and costs. It did not make clear how shareholders believed they might be harmed if the merger closed on schedule.
On Thursday, Musk said he had raised around $7 billion, including from sovereign wealth funds and friends in Silicon Valley, to help fund a takeover.
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