The Elon Musk-Twitter deal was the biggest buyout offer the world of technology has ever seen in recent times. However, in a filing, Musk’s lawyers said Twitter had failed or refused to respond to multiple requests. Hence, Elon Musk had to pull out of the $44 billion deal, said the sources.
Elon Musk Dumps Twitter Deal
Elon Musk, the chief of Tesla and the world’s richest person, said on Friday he was sacking his $44 billion deal to buy Twitter because the social media company had failed to provide information about fake accounts.
In a regulatory filing, Elon Musk’s lawyers said Twitter had failed to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business performance.
Elon Musk also alleged that Twitter breached the agreement when it fired two top managers, without his consent as required by their contract.
After this, shares of Twitter were down 7% in extended trading. Musk had offered $54.20 per share in April.
According to the reports, the contract signed between Musk and Twitter shareholders called for a $1 billion breakup fee, provided the Tesla CEO failed to proceed with the deal. This included reasons such as blockade of the deal by regulators or lack of acquisition financing.
However, the contract made it clear that if Musk terminated the deal on his own, then, the break-up fee would not be applicable. Angry by the sudden development, Twitter Chairman Bret Taylor informed that the Board would pursue legal action against Elon Musk.
Reacting to this, Twitter’s chairman, Bret Taylor said on the micro-blogging platform that the board planned to seek legal action to enforce the merger agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk…,” he wrote.
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