July 8 (UPI) — Billionaire entrepreneur Elon Musk indicated Friday he is seeking to call off his proposed $44 billion deal to buy the Twitter social media platform.
In a letter sent to Twitter’s chief legal officer and disclosed in a Securities Exchange Commission filing, Musk’s attorneys contend Twitter “has not complied with its contractual obligations” to provide accurate assessments of how many fake user accounts are on its system.
Twitter claims that only about 5% of its “monetizable daily active users” are spam accounts — a figure that Musk has publicly challenged as far too low.
“Twitter has failed or refused to provide this information,” attorney Mike Ringler wrote in the letter. “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 served as notice Musk is officially seeking to walk away from the deal. Under its terms, he can back out for a $1 billion fee, but Twitter’s board can sue if they believe the move is being made in bad faith.
Twitter Board Chairman Bret Taylor indicated Friday the company will indeed wage a legal battle against Musk forcing him to prove the company has breached the 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 said in a tweeted statement. “We are confident we will prevail in the Delaware Court of Chancery.”
It is in the company’s best interests to complete the deal at the original price of $54.20 per share since its stock has dropped substantially since the merger was announced in late April. It closed at $36.81 per share on Friday. (function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(d.getElementById(id))return;js=d.createElement(s);js.id=id;js.src=’https://experience.ex.co/sdk.js’;fjs.parentNode.insertBefore(js,fjs);}(document,’script’,’exco-sdk’));
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