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Elon Musk is finalizing his $ 44 billion deal to buy Twitter, according to a document the billionaire made Friday in the Securities and Exchange Commission.
Musk’s lawyers sent a letter on Twitter saying he is “terminating his merger agreement,” according to the filing. In the letter, Musk argues that he has a right to abandon the deal because Twitter has not given him enough information about the company’s business.
Musk’s lawyers accused Twitter of “failing or refusing to” deliver information that would help Musk and his team determine the actual number of bots or spam accounts on the social media platform.
“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes rejected them for seemingly unjustified reasons, and sometimes claimed to comply with them while giving Mr. Musk incomplete or unusable information,” the letter says. .
Elon Musk’s deal to buy Twitter is in jeopardy
Twitter board chairman Bret Taylor tweeted Friday that the company would take legal action against Musk.
“The Twitter Board agrees to close the transaction according to the price and terms agreed with Mr. Musk and plans to initiate legal action to enforce the merger agreement,” he wrote. “We are confident that we will prevail in the Delaware Chancellery Court.”
Legal experts have said Musk cannot walk away from the deal. His April deal to buy the company included a commitment to carry out the acquisition unless there is a major change in the business, and legal experts say nothing has happened to reach that threshold. Musk has previously threatened to cancel the deal if Twitter did not give you more data to run your own analysis on how many spam bots you have, while Twitter has said it can’t give up its users’ personal information, such as their names, emails and IP addresses, which it uses to create your own data. bot numbers.
Musk did not immediately respond to requests for comment.
Read the letter filed by Musk’s lawyers seeking to terminate the $ 44 billion Twitter deal
In the letter, Musk accused Twitter of a material breach of the provisions of the agreement, making “false and misleading” representations and also cited the likelihood of a “material adverse effect,” a significant change that would affect the value of the company.
“In short, Twitter has not provided the information Mr. Musk has requested for nearly two months, despite his repeated and detailed clarifications aimed at simplifying Twitter’s identification, compilation, and disclosure of the most relevant information sought. in Mr. Musk’s original requests, “he said. letter said.
In the letter, Musk also referred to the company’s finances as a potential reason for leaving the deal, citing the company’s “declining business prospects and financial prospects” as an independent reason to terminate the deal. ‘agreement.
Musk argued in the letter to the company that Twitter broke its agreement not to substantially disrupt its business after the agreement was signed by firing two senior executives in May and making layoffs to its hiring team in July. Musk said he did not waive the right to do due diligence when he signed the deal and hoped Twitter would come in with more information.
Legal experts have said that when he signed the agreement he agreed to buy the company as is.
Musk shook the social media world in April by agreeing to buy Twitter for $ 44 billion. He has assembled a large group of co-investors and has taken advantage of his personal wealth to get the debt needed to end the deal. But shortly after its acquisition announcement, a global sale of technology shares eroded Musk’s own equity, while making its $ 54 share purchase price seem like a serious overvaluation of Twitter.
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Musk skeptics have said he invented the argument about robots simply to find a reason to get out of what he now saw as a bad deal. Musk himself knew about the Twitter spam problem and mentioned it as one of the reasons he wanted to buy the company in the first place.
Wall Street has been skeptical for months about Musk completing the deal. The price of Twitter shares is about $ 37 today, nearly 30 percent more than the $ 52 it traded on the day it made the acquisition announcement.
The presentation came after The Washington Post reported on Thursday that the deal was in grave danger, with one of the co-investors unaware of Musk’s team for weeks, according to people familiar with the situation who spoke on condition of ‘anonymity to talk about sensitive matters. .
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