Elon Musk says he is pulling $44bn Twitter deal

Company says it will sue the billionaire to complete merger to which they reportedly agreed

Elon Musk's Twitter profile on a smartphone. Reuters
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Billionaire Elon Musk formally filed paperwork on Friday stating that he is terminating his transaction to purchase the Twitter social network for $44 billion, claiming the company did not meet requests to give him relevant business information.

His lawyer's letter to the company's chief legal officer said that Twitter did not meet attempts to share information on bots, fake or spam accounts on the platform.

"Accordingly, for all of these reasons, Mr Musk hereby exercises X Holdings I, Inc’s right to terminate the Merger Agreement and abandon the transaction contemplated thereby, and this letter constitutes formal notice of X Holding I, Inc’s termination of the Merger Agreement pursuant to Section 8.1(d)(i) thereof," it concluded.

The move comes after a tumultuous period of tensions between the company and Mr Musk, with the Tesla and SpaceX CEO tweeting several ideas of how he'd push for free speech on the platform and increase company income.

Twitter says it will take Mr Musk to court for not completing the $44bn merger on which they reportedly agreed.

"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," Bret Taylor, chairman of the company's board, said in a tweet.

"We are confident we will prevail in the Delaware Court of Chancery," he concluded signalling that there could be a legal challenge by the company.

Mr Taylor's tweet was retweeted by Twitter CEO Parag Agrawal on Friday evening.

The billionaire made the offer to buy the company at $54.20 per share in April, which the company and its board agreed to after much internal debate and spirited conversation on the social media forum.

It was eventually approved with the company "committed" to the deal, with terms including a $1bn breakup fee if the merger did not go through. It is unclear if Friday's filling will require Mr Musk to pay Twitter that fee.

The merger agreement's terms also allowed for Twitter to sue Mr Musk if he did not want to complete the deal.

Mr Musk's lawyer argued that data and documents he requested from the company was essential to learning about its performance.

The Washington Post reported on Thursday that Mr Musk's bid was in trouble following his efforts to authenticate Twitter's data on spam accounts.

"Twitter has and will continue to cooperatively share information with Mr Musk to consummate the transaction in accordance with the terms of the merger agreement," a company statement said. "We intend to close the transaction and enforce the merger agreement at the agreed price and terms."

Mr Musk's lawyer said in his letter that “Twitter has failed or refused to provide this information".

The letter was revealed in a Securities and Exchange Commission (SEC) filing after market close, but Twitter stocks decreased 5 per cent after hours.

Updated: July 09, 2022, 4:57 AM
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