In a letter to Twitter, filed with the US Securities and Exchange Commission (SEC), Elon Musk said that he is terminating the $44B Twitter takeover deal citing Twitter’s false and misleading statement regarding its users’ data. Twitter board chair, Bret Taylor, said that Twitter will go to court to enforce the deal.
Twitter to Sue Musk over $44B Twitter Takeover Deal
“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 on his official Twitter account. “We are confident we will prevail in the Delaware Court of Chancery,” he added.
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. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
Earlier, the chief executive of Tesla had threatened to halt the $44B Twitter takeover deal if the company fails to provide data on its spam and bot accounts. In response, Twitter gave Mr. Musk access to its “firehose”, which is its storage location of raw data on hundreds of millions of daily tweets. Christopher Bouzy, the founder of research firm Bot Sentinel, which tracks fake Twitter accounts, said; “This whole process has been bizarre. He knew about this problem. It’s odd that he would use bots and trolls and inauthentic accounts as a way of getting out of the deal.”
$1 Billion Deal Termination Fee
According to the terms of the deal, it requires either party to pay a $1bn (£830m) break-up fee in case they back off from the deal. The merger agreement also allows Twitter to force Musk to consummate the deal. Moreover, the company has repeatedly said to take a legal path in order to enforce the fulfillment of the $44B Twitter takeover deal. The UCLA law professor, James Park, said: “Musk can make this argument, but I think it’s a weak one. To me, this is just a pretext for him to pull out of the deal.”