Elon Musk withdraws from the deal to buy Twitter

Elon Musk is canceling his $ 44 billion deal to buy Twitter, according to a filing the billionaire submitted to the Securities and Exchange Commission on Friday.

Musk’s lawyers sent a letter to Twitter saying they were “terminating their merger agreement,” according to the archive. In the letter, Musk argues that he has the right to drop the agreement because Twitter has not given him enough information about the company’s activities.

Musk’s lawyers accused Twitter of “failing or refusing” to provide information that would help Musk and his team determine the true number of robots or spam accounts on the social media platform.

“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 providing Mr. Musk with incomplete or useless information,” it said. that in the letter.

Elon Musk’s deal to buy Twitter is in jeopardy

Twitter chairman Bret Taylor tweeted on Friday that the company will take legal action against Musk.

“The Twitter Board is committed to terminating the transaction on the price and terms agreed with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” he wrote. “We are confident we will win in the Delaware Court of Chancery.”

Legal experts have said that Musk can not just walk away from the agreement. His agreement in April to buy the company included an obligation to review the acquisition unless there is a major change in the business, and legal experts say nothing has happened to reach this threshold. Musk has previously threatened to reject the deal if Twitter did not give him more data to run his own analysis of how many spam bots it has, while Twitter has said it can not provide personal information about users such as names, emails and IP addresses, which it uses to get up with their own fine numbers.

Musk did not immediately respond to requests for comment.

Read the letter filed by Musk lawyers seeking to end the $ 44 billion Twitter deal

In the letter, Musk accused Twitter of a significant breach of the terms of the agreement, made “false and misleading” representations and also cited the likelihood of a “significant negative effect”, a significant change that would affect the value of the company.

In short, Twitter has not provided information that Mr. Musk has requested in almost two months despite his repeated, detailed clarifications intended to facilitate Twitter’s identification, collection and disclosure of the most relevant information sought in Mr. Musk’s original requests, “letter said.

In the letter, Musk also referred to the company’s finances as a potential reason to get out of the agreement, and cites the company’s “declining business prospects and financial prospects” as a separate reason for terminating the agreement.

Musk claimed in the letter to the company that Twitter broke the agreement not to change the business significantly after the agreement was signed by firing two top managers in May and laying off layoffs in the hiring team in July. Musk said he did not relinquish the right to do due diligence when he signed the deal, and expected Twitter to provide more information.

Legal experts have said that when he signed the agreement, he agreed to buy the company as it is.

Musk shook the social media world in April by agreeing to buy Twitter for $ 44 billion. He has gathered a large group of co-investors, and used his personal fortune to get the debt needed to complete the deal. But just after the announcement of his takeover, a global sale of technology shares eroded Musk’s own fortune, while his purchase price of $ 54 per share looks like a serious overestimation of Twitter.

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Musk skeptics have said he came up with the argument about robots simply to find a reason to get out of what he now saw as a bad deal. Musk himself knew about Twitter’s spam problem, and mentioned it as one of the reasons he wanted to buy the company in the first place.

Wall Street has been skeptical that Musk will complete the deal for several months. Twitter’s share price is around 37 dollars today, a decrease of almost 30 percent from 52 dollars it was traded on the day he announced the acquisition announcement.

The filing came after The Washington Post on Thursday reported that the deal was in serious danger, with one of the co-investors who has not heard from Musk’s team for several weeks, according to people familiar with the situation who spoke on condition of anonymity to discuss sensitive issues. .

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