Twitter to sue Elon Musk for ending USD 44 billion deal, hires top legal firm
11 July, 2022 | Vaishali Sharma
Twitter is contemplating legal action against Tesla and SpaceX CEO Elon Musk over his decision to terminate a USD 44 billion takeover deal.
Twitter is contemplating legal action against Elon Musk over his decision to terminate a USD 44 billion takeover deal.
As per The Hill, the microblogging site has hired a large New York-based law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares to sue Musk. Twitter will file its lawsuit in Delaware next week. Meanwhile, Musk is being represented by the law firm Quinn Emanuel Urquhart & Sullivan.
On Saturday, Bret Taylor, Twitter’s chairman said, “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.”
A letter delivered by Musk’s team to Twitter earlier on Saturday contained an announcement that the USD 44 billion deal to acquire Twitter had been terminated.
Due to many violations of the acquisition agreement, Musk made the decision to halt the transaction.
The letter states that the Tesla CEO’s staff is adamant that the percentage of spam and false accounts is “wildly higher” than 5%.
“As further described below, Mr Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement,” the letter said on Friday.
“In short, Twitter has not provided information that Mr Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr Musk’s original requests.”
In April, Musk reached an acquisition agreement with Twitter at USD 54.20 per share in a transaction valued at approximately $44 billion. However, Musk put the deal on hold in May to allow his team to review the veracity of Twitter’s claim that less than 5% of accounts on the platform are bots or spam.
Back in June, Musk had openly accused the microblogging website of breaching the merger agreement and threatened to walk away and call off the acquisition of the social media company for not providing the data he has requested on spam and fake accounts.
Musk alleged that Twitter is “actively resisting and thwarting his information rights” as outlined by the deal, CNN reported, citing the letter he sent to Twitter’s head of legal, policy and trust, Vijaya Gadde.
In order to corroborate its assertions that bots and phoney accounts make up fewer than 5% of the platform’s active user base—a statistic the business has repeatedly cited for years in boilerplate public disclosures—Musk asked that Twitter disclose over information regarding its testing procedures.