Twitter likely to win in court, First Horizon/TD Bank likely to be approved - investor
Scott Olson

Twitter (NYSE:TWTR) is likely to win its court battle with billionaire Elon Musk over his attempts to get out of his $44 billion takeover of the social media giant.
"There are very good odds that after the trial, Twitter receives a judgment for specific performance or, at the very least, significant monetary damages well in excess of the one billion dollar reverse breakup fee.â Roy Behren, managing member at Westchester Capital and co-portfolio manager of The Merger Fund (MUTF:MERFX), said in an interview with Seeking Alpha last week. "We think the odds are very low that Twitter loses completely and that there will either be no settlement, specific performance or monetary damages awarded."
Twitter could trade to below $30, potentially into the $20s if Musk were to win in a case, according to Behren. He does see the possibility of some settlement before a trial, where a few dollars could be chopped.
Twitter may want to "avoid the distraction over the next couple months and the uncertainty of a court outcome," Behren added. "It may decide in the big picture it's willing to take a couple dollars less rather than wait it out till the end of October for a court judgement."
Behren's comments come as Musk's legal team on Friday updated his reasoning for a separate basis for terminating the transaction, citing a reported $7 million settlement the company made with a whistleblower.
Musk is "doing everything he can to embark on a scorched earth policy," Behren said. "We don't think he's going to be successful."
Behren also discussed several other ongoing deals and their potential outcomes. He expects that TD Bank (TD) will succeed in its planned $13.4 billion acquisition of First Horizon Corp. (NYSE:FHN) as the transaction awaits Federal Reserve and OCC approval. He explained that the deal is currently trading at a 75%-78% chance of close, which he sees as too low.
"We think it's much higher than that and it's very rare that bank deals get blocked in general," Behren said. "Over the past decade you can probably count on one or two hands the amount of bank deals that have been blocked."
As for Broadcom's (AVGO) more than $60 billion purchase of VMWare (NYSE:VMW) "we think it's much more likely than not that it will eventually be completed and we think it's mispriced here with the market implying it's a coin toss," Behren said. "We think it's much better than a coin toss."
Behren expects to see more deals this year, especially with private equity firms looking to do transactions.
"There's a massive amount of dry powder on the books of private equity firms right now," Behren said. "If you lever up the amount of dry powder the potential exists for a huge amount of private equity transactions."
"The bankers that we talk to indicate that their pipelines are fairly full and they're staffing up their deal teams," Behren added. 
Behren expects the companies that have recently been de-spac'd may also become takeover targets as their share prices have been crushed.
"People expected there to be much more of a lull in M&A activity than there was," Behren said. "Deal activity has been fairly robust over the summer and things typically pick up in the fall and slow down towards the end of the year. Private equity has a lot of money to deploy if they want to earn their carry. So we expect deal activity to continue at a high pace."
Also see, M&A may be a tailwind for biotech sector into end of year, analyst says.