Elon Musk has decided to pull out of the Twitter deal because the social media firm had breached multiple provisions. The two are expected to engage in a lengthy legal dispute as a consequence of Musk’s decision. Twitter said on Friday that it planned to sue Musk to complete the $44bn mergers and that it was “confident” it would prevail.
Musk has filed a 95 pages long acquisition agreement with US Securities and Exchange Commission. However, Musk must demonstrate that Twitter broke the terms of the original contract. Failing to do so, he may have to pay a $1 billion breakup fee.
Explaining his decision, Musk’s lawyers wrote, “Mr. Musk is terminating the merger agreement because 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, and is likely to suffer a Company Material Adverse Effect.”
Elon Musk officially pulls out of the Twitter deal
When Elon Musk and his attorneys claimed that Twitter was hiding details regarding the amount of “spam” accounts on the network, things took a bad turn.
“Twitter has failed or refused to provide this information. 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 letter said.
On April 25, the CEO of Tesla and the wealthiest man on the planet agreed to purchase Twitter. April 14, he announced his takeover. Later, on May 13, he declared that the agreement was “on hold.” He was waiting for information to back up Twitter’s claim that less than 5% of its users were spam or fraudulent accounts. He stated that the percentage was 20% and that Twitter would have to provide evidence of a lower proportion for the deal to proceed.