Official wait period for Musk’s acquisition deal has expired, claims Twitter

Official wait period for Musk’s acquisition deal has expired, claims Twitter
Photo Credit: Reuters
3 Jun, 2022

Social media platform Twitter reportedly said earlier today that the official wait period for the transaction put forth by Elon Musk to acquire the platform has expired. The wait period is classified in United States law as the Hart-Scott-Rodino Antitrust Improvements Act, known commonly as HSR Act, which requires companies going through a merger or acquisition to wait for an initial period of 30 days after filing the acquisition details with the country’s Federal Trade Commission (FTC) and and the United States Department of Justice (DoJ).

Twitter’s claim regarding the expiry of the HSR Act waiting period was reported earlier today by Reuters.

The HSR Act also requires companies to abide by a second, 30-day waiting period, if the FTC or DoJ raise concerns regarding market competition. The latter is referred to as “second request”, which can stall an acquisition by a further 30 days.

Expiration of the wait period under the HSR Act typically implies that a proposed merger or acquisition is now expected to be completed on an urgent timeline, subject to customary deal closing practices that, in this case, include approval from Twitter shareholders and the receipt of pending regulatory approvals.

However, Twitter’s acquisition by Musk is seemingly under hold right now, who has expressed concerns around the volume of bots and fake accounts on the platform. Musk has suggested that he is conducting an independent audit to gauge the volume of fake accounts on the platform, which he claims is much higher than the 5% number quoted by Twitter publicly.

Twitter, in response, has so far said that Musk failed to conduct due internal diligence and ask for data from within the company before making the acquisition offer.

It remains to be seen if Twitter’s assessment of the expiry of the wait period under the HSR Act is true. In August last year, the FTC had informed companies that it may not be able to conduct due competition diligence within the present stipulated timeline owing to a massive volume of mergers and acquisitions in the market right now. As a result, the regulatory body was noted to be warning companies to close acquisition deals at their own risk, since any detection of violation to competitive market practices could jeopardize an acquisition after two companies close a deal.

At the time of publishing, Musk was yet to issue a response regarding the expiry of the wait period of the acquisition.