Twitter Schedules Shareholder Vote on Elon Musk’s $44 Billion Takeover Bid

The meeting is set to occur while the company is preparing to go to battle with Mr. Musk in Delaware Chancery Court this fall, seeking to compel him to honor the terms of the merger agreement. Twitter said in the filing it is committed to completing the merger and that its board of directors has unanimously recommended that the shareholders vote in favor of it.

Mr. Musk and Twitter agreed to the acquisition in April. Mr. Musk indicated on July 8 he no longer planned to pursue the effort to buy Twitter and take it private. The company sued Mr. Musk on July 12 to force him to comply with the merger agreement.

“We are committed to closing the merger on the price and terms agreed upon with Mr. Musk,” Twitter said in the filing. “Your vote at the special meeting is critical to our ability to complete the merger.”

Last week, the chief judge of the Delaware Chancery Court granted Twitter’s request for an expedited trial, over Mr. Musk’s objections. It is due to take place in October, though a specific date hasn’t been set.

Mr. Musk’s lawyers asked the Delaware judge to schedule the trial for Oct. 17-21, according to a court filing Tuesday. Twitter has asked for an Oct. 10 trial, the filing showed.

Twitter’s shareholders are expected to vote in favor of the deal, which values the company at $54.20 a share. In its lawsuit against Mr. Musk, Twitter alleged he wants out because market conditions have soured since he made his bid for it in April, resulting in his personal wealth declining more than $100 billion since its peak in November.

Shares of Twitter closed at $39.34 Tuesday and are down almost 8% since the start of the year, compared with a decline of about 27% for the tech-heavy Nasdaq Composite Index this year.

Last week, Twitter reported second-quarter results that showed a surprising decline in revenue that it blamed on advertising weakness and uncertainty related to the deal. The company also reported a wider loss and said expenses included $33 million in acquisition-related costs.

Though Twitter’s shares rose about 1% after the report, analysts said Twitter’s stock likely would have taken a hit if Mr. Musk wasn’t on the hook to buy the company. A day earlier rival

Snap Inc.

posted its weakest-ever quarterly sales growth because of what it said was “increasing competition for advertising dollars that are now growing more slowly.”

Mr. Musk has said his primary reason for wanting out of his deal for Twitter is a lack of faith in the company’s longstanding estimate that less than 5% of its monetizable daily active users are spam or fake accounts. He has said that estimate is probably too low. In a May 6 meeting with Twitter executives about how spam and fake accounts are calculated, Mr. Musk ’s team said he was “flabbergasted to learn just how meager Twitter’s process was” and pointed to the absence of automated tools to help with the calculation, a recent court filing showed.

Twitter has said in securities filings that the number of fake and spam accounts on its platform could be higher than it estimates. The company said in its lawsuit that it “bent over backwards” to provide Mr. Musk the information he requested and that Mr. Musk repeatedly breached the terms of their agreement, such as by tweeting in May that the deal was “on hold.”

Twitter is seeking a remedy known as “specific performance,” meaning Mr. Musk would have to go through with the deal, rather than just monetary damages. Legal experts say the range of possible outcomes is limited and a settlement is possible at any point. If Twitter succeeds in getting a judgment for specific performance, Mr. Musk would be expected to file an appeal.

Write to Sarah E. Needleman at [email protected]