Twitter Sues Elon Musk For Backing Out Of His $44 Billion Takeover
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Twitter has launched a lawsuit against Elon Musk after the tech billionaire pulled out of his $44 billion takeover deal.
Musk announced last week that he was planning to pull out of the humungous deal on the grounds he had been misled by the powers that be at the social media giant.
Lawyers acting for the Tesla owner said that Twitter ‘appears to have made false and misleading representations upon which Mr Musk relied when entering into the Merger Agreement’, according to documents submitted to the US Securities and Exchange Commission (SEC).
However, this doesn't appear to be a good enough reason for pulling out for Twitter and it looks like it wants to force Musk's hand.
The lawsuit launched today (July 12) says the tech billionaire needs to honour his agreement.
“Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” according to the lawsuit (via The Guardian).
“Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
The lawsuit also savagely rips into why Twitter thinks Musk is playing around with the deal.
"Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," lawyers for Twitter have alleged.
"This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business."
The lawsuit was filed in filed in Chancery Court in Delaware, where Twitter is incorporated.
The crux of Musk's reason to back out of the deal was that he claims Twitter hasn't been forthcoming with information about how many bot accounts exist on the social media platform, as well as certain other bits of user data.
In his letter to the SEC, Musk argued that Twitter has ‘not complied with its contractual obligations’ relating to the deal, claiming he was not given enough information to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform’.
Musk also took issue with Twitter organising employee layoffs without his approval, according to Insider.
Despite his move, Twitter believes Musk will eventually follow through with his deal.
Twitter’s chairman Bret Taylor tweeted: “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.”