In April we heard by word of mouth Elon Musk that it has submitted a takeover proposal Twitter for $44 billion. After it was accepted the shenanigans began, with Tesla's CEO eventually freezing the process due to a dispute over the number of bots on the platform. It was heavily rumored that the world's richest man wanted to complete the deal by paying less and has now decided to pull out of it.
Musk's team, in a filing with the US Securities and Exchange Commission, cites "material breach of multiple provisions" of the agreement and "false and misleading statements" by Twitter as the reasons for its termination. The platform is also accused of failing to comply with its obligations under the agreement.
According to the filing, Musk repeatedly requested data about spam bots on Twitter to "make an independent assessment of the prevalence of fake or unwanted accounts on the Twitter platform", but the company did not provide this information.
Twitter either ignored the mogul's requests or rejected them for "reasons that appear to be unjustified". According to the testimony, it sometimes seemed to comply with his requests by providing incomplete or useless information.
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
In response, Twitter Chairman Bret Taylor said the company's board is committed to closing the deal at the price and terms agreed to by Musk and plans to take legal action to enforce the merger agreement.
Musk is required to pay $1 billion to Twitter as part of the contract if he cannot complete the acquisition. For this reason, he will have to make strong arguments to justify the withdrawal to avoid paying the breakup fee to the social network.
It remains to be seen whether legal action will indeed be taken or whether there will be a settlement.