Billionaire Elon Musk placed Twitter on notice Friday that he intends to exit negotiations to buy the social media juggernaut.
Musk announced his intentions to nix the $44 billion deal in a letter sent by a lawyer on his behalf to Twitter’s chief legal officer late Friday afternoon, CNBC reported.
Breaking: Elon Musk has terminated his agreement to purchase Twitter $TWTR
— Ed Ludlow (@EdLudlow) July 8, 2022
In the letter, disclosed in a Securities and Exchange Commission filing, Skadden Arps attorney Mike Ringler charged that “Twitter has not complied with its contractual obligations,” CNBC reported.
Update 6:23 p.m. EDT July 8: Bret Taylor, chairman of Twitter’s board of directors, tweeted Friday that the body 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.”
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
Original report: Specifically, the letter argued that Twitter is in “material breach of multiple provisions of that agreement” and appears to have made “false and misleading representations” when entering into the agreement, The Wall Street Journal reported, citing the regulatory filing Friday.
Twitter officials have not responded publicly to Musk’s volley, and it was not immediately clear if Twitter’s board of directors will accept the $1 billion breakup fee, or if a larger court battle looms, according to The Associated Press.
According to CNBC, Ringler claimed that Twitter failed to provide Musk with requested business information that would allow the Tesla CEO to assess Twitter’s claims that spam accounts constitute roughly 5% of the platform’s monetized daily active users.
“Twitter has failed or refused to provide this information,” Ringler wrote, adding, “Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
Ringler also alleged in the letter that Twitter has provided “materially inaccurate representations” that have breached the merger agreement. He also claimed the company failed to obtain Musk’s consent before altering its business, pointing specifically to recent layoffs at the company, CNBC reported.
Twitter officials have stated repeatedly in recent weeks that the company is “sharing information with Musk to consummate the deal as laid out in the merger agreement — and that it intended to close the transaction and enforce the agreement at the agreed price and terms,” the Journal reported.
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