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After months of speculation, it was finally revealed that Elon Musk was terminating his $44 billion deal to buy Twitter. The news arrived on Friday that the Tesla CEO pulled out of the deal due to the social media company breaching multiple provisions of the merger agreement.
However, the saga continues as Twitter chairman Bret Taylor revealed that the board plans to pursue 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 and plans to pursue legal action to enforce the merger agreement,” he tweeted. “We are confident we will prevail in the Delaware Court of Chancery.”
Musk’s lawyers stated in a filing that Twitter failed or refused to respond to his requests for information on fake or spam accounts on the platform – factors that have been fundamental to the company’s business performance.
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“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,” the filing wrote.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement.”
The Tesla CEO also explained that he was abandoning his pursuit because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching the company’s obligation to “preserve substantially intact the material components of its current business organization.”
Meanwhile, Twitter explained that Musk is not legally entitled to call off the deal without presenting a solid reason, refusing to agree with the spam account information reason.
The platform maintains that it provided Musk with the information he requested.
Had the Tesla CEO maintained his course and succeeded, he would have brought the changes he promised, such as reversing Twitter’s suspension of Donald Trump’s account after the 2021 Capitol riots.
Wedbush analyst Dan Ives weighed in on his opinion of the affairs, saying, “This is a disaster scenario for Twitter. Now the company will battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum.”
“This soap opera has seen many twists and turns and now ultimately Twitter goes back to the drawing board,” he added. “This was always such a head scratcher to go after Twitter at a $44 billion price tag for Musk and never made much sense to the street, now it ends (for now) in a Twilight Zone ending with Twitter’s Board back against the wall and many on the Street scratching their head around what is next.”
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