Elon Musk breaks Twitter purchase agreement and the social network will sue him to enforce the deal
The soap opera that has become the purchase of Twitter by Elon Musk lives a new chapter after the tycoon has communicated that he withdraws the acquisition offer. Musk alleges a breach of the agreement by Twitter, something denied by the board of directors of the social network, which through its president has already advanced that it will sue the billionaire to comply with the agreement and pay the $43 billion promised.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on the Twitter platform,'” reads the letter that Elon Musk’s legal team has sent to the U.S. Securities and Exchange Commission. “This information is critical to Twitter’s business and financial performance and essential to complete the transactions contemplated by the merger agreement […].”
“Twitter has failed or refused to provide this information,” the message continues. “At times, Twitter has ignored Mr. Musk’s requests, sometimes refused them for reasons that appear unwarranted, and sometimes claimed to comply while giving Mr. Musk incomplete or useless information.” Musk’s lawyer claims that the buyout offer was made based on Twitter’s public data on the number of fake or spam accounts. Believing that this information was inaccurate, the tycoon says he is in a position to rescind the deal.
Not seeing it the same way is Bret Taylor, chairman of Twitter’s board of directors, who in a tweet has communicated that he “is committed to closing the transaction with the price and terms agreed with Mr. Musk.” To achieve this, the company plans to file a lawsuit. In court, it will be up to Musk’s legal team to prove that Twitter has breached the purchase agreement, as the billionaire can’t just walk away. The legal battle is on.
Elon Musk began by acquiring 9.2% of Twitter last April in a $2.89 billion deal. A few days later he launched a buyout offer that valued the social network at $43 billion, and the board of directors accepted the proposal. However, Musk soon paved the way for a backtrack and in May stalled the acquisition by claiming that “at least” 20% of Twitter accounts could be fake. Two months later, Musk calls off the deal and will be sued.
There is a good reason why Elon Musk wants to walk away from the deal and Twitter to keep it. The tycoon committed to pay $54.20 for each share of the social network, which right now trades at $36.81. In addition, if the purchase is not consummated the culprit must pay $ 1 billion.