Elon Musk reportedly closed his $ 44 billion deal to buy Twitter on Friday. The news came after months of speculation about whether or not he would take over the company, but it turned out that there were several reasons he had given up on his pursuit, including what he believed was a violation of their laws.
In a surprising development, Twitter president Bret Taylor announced that the board intends to take legal action against Musk.
“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.”
In a surprising development, Elon Musk’s lawyers accused Twitter of not responding or refusing to respond, revealing fake account information that is critical to the company’s performance.
“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.”
Tesla CEO Elon Musk said he abandoned his research because Twitter fired senior executives and a third of its talent acquisition team, in violation of its commitment to “maintain the core components of its current commercial organization”.
Twitter said Musk had no legal right to rescind the deal without giving a reason and dismissed his argument over spam account information.
The company said it provided Musk with all requested information.
If Tesla CEO Elon Musk had stayed the course and taken control of Twitter, he could have made the promised changes, such as:
Commenting on the matter, Wedbush analyst Dan Ives said, “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.”
Opinions expressed by US Insider contributors are their own.
