Elon Musk faces a potential backlash over his proposed Twitter takeover after a Florida pension fund sued the social media platform’s board.
The Orlando Police Pension Fund has demanded that two-thirds of Twitter’s independent shareholders vote on the deal, rather than the standard 50 per cent required.
Court action: Elon Musk is running into trouble over his proposed Twitter takeover
Under the law, if a shareholder owns more than 15 per cent of a company and tries to buy outright ownership then a higher threshold must be secured.
The Orlando pension fund, in its complaint filed yesterday, highlighted how 50-year-old Musk, Morgan Stanley and Jack Dorsey together own around a fifth of Twitter.
The lawsuit proposed that Musk’s 9.2 per cent stake should be added to Morgan Stanley’s stake, as it is providing debt financing for the deal, and Dorsey’s, a Twitter co-founder and director who has been an ally of the billionaire.
The Court of Chancery in Delaware, where Twitter is incorporated, must decide whether to grant the Orlando pension fund’s request that the standard for shareholder approval be two-thirds of the votes not held by Musk, Morgan Stanley and Dorsey.
