The news of Musk’s possible ownership of Twitter flooded the news some three months ago with his $44 million takeover proposition. The deal was to be sealed off sometime soon. However, Musk has within this period raised scepticism of the many possible fake and spam bot accounts on the platform. Now he tries to back out of the deal.
On Friday, Musk declared openly that he would not be moving forward with the $44 billion acquisition, writing that he would be “terminating” his agreement with the company.
In a letter dated Sunday, but filed with the SEC on Monday, Twitter called Musk’s move to terminate the deal “invalid and wrongful.”
Shortly afterwards, Musk tweeted an image of an armed character for the popular video game Elden Ring but did not add any further explanation.
Remember Musk appeared confident in his move to acquire Twitter earlier this year, securing approximately $25.5 billion in financing from outside lenders in addition to $21 billion of his own money in April, why is he now having cold feet in sealing off the deal?
Earlier in May, Musk announced that the deal was “temporarily on hold” pending an investigation into spam and bot accounts on the platform.
Amidst Musk’s replete scepticism about the prevalence of spam accounts on the platform, Twitter maintained that those accounts constitute fewer than 5% of its users. The company also provided Musk with internal data to support its claim.
But on Friday, Musk’s legal team announced he was officially walking away from the deal, again citing spam and bot accounts on the platform and arguing that the company had misrepresented itself.
“Twitter has not complied with its contractual obligations,” wrote Musk’s legal team in a letter submitted with their formal SEC filing.
Twitter’s letter in response made public on Monday rejects that claim.
“Mr Musk’s and the other Musk Parties’ purported termination is invalid and wrongful,” wrote William Savitt, an attorney for the firm Wachtell, Lipton, Rosen & Katz. “And it constitutes a repudiation of their obligations under the agreement.”
“Contrary to the assertions in your letter, Twitter has breached none of its obligations under the agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect,” Savitt continued.
Twitter and Musk will most likely face a prolonged legal battle in Delaware, where the original contract stipulates any business disputes must be resolved.
Bret Taylor, the chairman of Twitter’s board, has already made clear that the company stands by the deal, and will pursue legal means against Musk to hold up his end of the bargain.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement,” Taylor wrote last Friday. “We are confident we will prevail in the Delaware Court of Chancery.”