Elon Musk has withdrawn from his highly contentious multi-billion dollar bid to acquire Twitter, citing various breaches of the agreement including misrepresentation of facts.
Twitter has failed to comply with repeated requests for information regarding the prevalence of false users, bots, and spam accounts, according to a legal filing made by Musk’s lawyer.
The billionaire has also sought to learn Twitter’s process for identifying such accounts, board materials relating to calculations around the number of fake accounts, and materials related to Twitter’s financial condition.
After a slate of high-profile mergers and acquisitions (M&As) in 2021, this deal is set to be one of the most significant this year. His intention to pull out of the agreed-upon $44 billion (approximately £36 billion) agreement, however, will now likely spark a ferocious legal battle.
Musk will now seek to avoid paying the $1 billion (roughly £830 million) termination fee, while the Twitter board is determined to see the transaction through on its original terms.
“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,” said Twitter board chair Bret Taylor, reflecting the company’s official position. “We are confident we will prevail in the Delaware Court of Chancery.”
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Musk initially agreed to purchase the company for $54.20 per share. The company’s valuation, however, has since fallen sharply due to the ongoing discourse, especially after the Tesla CEO withdrew from the agreement over the weekend.
Since the deal was signed in April, Musk has made several public assertions that Twitter is severely underestimating the proportion of fake accounts on its platform.
The social media network has since instigated several high-profile moves including seeing multiple executives leaving the business alongside a hiring freeze ahead of the deal’s completion. Musk has also taken issue with these moves, with his lawyer suggesting the company failed to seek his consent.
In May, he said the deal was on hold as he strove to evaluate the number of fake users, bots and spam accounts.
Twitter has maintained the proportion of accounts that fall under this bracket is 5% of all users, although it has previously stated in legal documents this count could be slightly higher than estimates suggest.
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