20220817 Elon Musk
Elon Musk Image Credit: AFP

Twitter Inc's shareholders approved a $44 billion buyout by Elon Musk on Tuesday, handing over the deal's outcome to a court battle in which the billionaire is trying to scrap the purchase.

A majority of Twitter shareholders voted in favor of accepting Musk's $54.20-a-share offer to acquire the social-networking company, according to a preliminary vote count read on Tuesday. Musk made the bid in April and has since sought to rescind it. Twitter's board - along with two prominent advisory firms - had encouraged investors to ratify the deal. The company's shares are trading at $41.77, well below Musk's proposed price, and were little changed by the vote.

The shareholder meeting lasted 7 minutes, with polls open for about 3 minutes. Shareholders could also submit votes for several weeks ahead of the meeting.

While shareholder approval was required to finalize the deal, its consummation is far from a sure thing. Musk in July said he was canceling the agreement, claiming that Twitter misled him about the size of the company's user base and the number of bots and spam accounts. Twitter denies those accusations, and sued Musk in a Delaware court to force him to complete the acquisition. Musk then counter-sued the company.

Lawyers for both Musk and San Francisco-based Twitter for weeks have been fighting over witnesses, evidence and even the court date. The trial is currently set for the week of Oct. 17 in Delaware Chancery Court.

Musk has recently sought to bolster his case by citing revelations from a former senior Twitter executive-turned-whistle-blower who came forward at the end of August. Peiter "Mudge" Zatko, Twitter's former head of security, alleges that the company is in violation of multiple regulatory requirements, has lax security practices and has given misleading information about the number of bots on its service.

Twitter denies Zatko's claims, calling him a disgruntled former employee who was fired for poor performance.