Bloomberg Law
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Law
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

Twitter’s Sale Steered by Wilson Sonsini, Simpson Thacher (1)

April 25, 2022, 7:53 PMUpdated: April 25, 2022, 10:32 PM

Three prominent law firms have joined talks for Elon Musk to buy Twitter Inc., which agreed Monday to accept the technology entrepreneur’s bid taking it private.

Wilson Sonsini Goodrich & Rosati and Simpson Thacher & Bartlett are serving as outside counsel to Twitter on the deal, according to a statement announcing the transaction with Musk. Wilson Sonsini has been Twitter’s longtime outside corporate counsel, while Simpson is representing the company’s board.

Skadden, Arps, Slate, Meagher & Flom corporate partner Michael Ringler, who joined the firm from Wilson Sonsini in 2019, is representing Musk along with partners Sonia Nijjar and Dohyun Kim. Musk had initially turned to a legal team led by McDermott Will & Emery tax partner John Lutz and corporate partner Heidi Steele.

The deal valuing San Francisco-based Twitter at $44 billion is one of the largest-ever leveraged buyouts of a publicly listed company, Bloomberg News reported.

Katharine Martin, chair of Wilson Sonsini’s board, is leading a roughly 30-lawyer team from the law firm representing Twitter that includes corporate partners Martin Korman and Douglas Schnell; corporate finance partners Erik Franks and Michael Occhiolini; corporate governance leader Amy Simmerman and Delaware law partner Ryan Greecher; antitrust leader Scott Sher; and employee benefits and executive compensation leader John Aguirre and partner Brandon Gantus.

Martin, based out of Wilson Sonsini’s headquarters in Palo Alto, Calif., helped take Twitter public in November 2013.

Alan Klein, a veteran mergers and acquisitions partner at Simpson, is leading a New York-based team advising Twitter’s board that also includes corporate partners Anthony Vernace and Katherine Krause.

Simpson in September advised Twitter on a nearly $810 million class action settlement. Cooley is co-counsel to Twitter in that suit, by investors who claimed the company misled them about user growth and engagement.

Twitter’s board adopted a so-called poison pill earlier this month to potentially thwart Musk’s takeover, before coming around to embrace the private bid. The company disclosed April 4 that Musk had acquired 9.2% of Twitter’s stock to become its largest shareholder.

Davis Polk & Wardwell is representing a group of financial services companies, including Morgan Stanley, which have agreed to provide debt financing for the proposed transaction, according to a securities filing last week.

The terms of Twitter’s all-cash sale to an entity owned by Musk call for the company to go private at a price of $54.20 per share. Musk has secured $25.5 billion in committed debt and margin loan financing and is providing a $21 billion equity commitment to finance the deal, Twitter said.

More Legal Advisers

Other Wilson Sonsini lawyers working on the company’s sale to Musk include finance partners Dana Hall, John Mao, and Michael Rosati; corporate partners Remi Korenblit and Lisa Stimmell; technology transactions partners John McGaraghan and Scott McKinney; privacy and cybersecurity partner Matthew Staples; regulatory partners Stephen Heifetz and Joshua Gruenspecht; tax partner Myra Sutanto Shen; and litigation partners Nina “Nicki” Locker and Evan Seite.

Twitter’s sale to Musk is expected to close later this year, the company said. Twitter’s two top in-house lawyers are chief legal officer Vijaya Gadde and general counsel Sean Edgett. Twitter disclosed in an annual proxy statement this month that Gadde’s total compensation soared last year to almost $17 million.

Gadde, who joined Twitter as its director of legal in July 2011, over the following decade became one of the company’s most important executives, vetting everything from transactions to presidential tweets. She could soon find herself in a very different corporate environment in a C-suite helmed by Musk.

Musk has long had an often fraught relationship with his lawyers, some of whom have praised his intellect while also noting the turnover that comes with working for a demanding boss. Bloomberg Law reported in March on Tesla Inc.—the Musk-led electric automaker—naming its third new legal chief in two years.

Twitter was started in 2006. Since the following year, Perkins Coie and Wilmer Cutler Pickering Hale and Dorr have collectively handled nearly 30% of the company’s caseload in U.S. federal courts, according to Bloomberg Law data. Wilson Sonsini had a role on 5% of Twitter’s federal litigation docket during that time.

WilmerHale is currently representing Twitter in a freedom of speech lawsuit filed by former President Donald Trump. Trump started his own social media company last year after being booted from Twitter and other social media platforms in the aftermath of the Capitol Hill riots on Jan. 6, 2021.

Truth Social, the Trump venture backed by a special purpose acquisition company, saw shares in the latter slide Monday amid fears that a Musk-owned Twitter could lead to the former president returning to its platform, according to Bloomberg News.

(Updates story throughout with more detail about the lawyers and law firms advising Twitter and Elon Musk.)

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com