Twitter says Musk’s latest attempt to scrap deal ‘invalid and erroneous’

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Sept 12 (Reuters) – Twitter Inc ( TWTR.N ) said on Monday that payments to a whistleblower did not violate any terms of its $44 billion acquisition of Elon Musk, after the world’s richest man made another attempt to scrap the deal.

In a letter to Twitter on Friday, lawyers for Musk said Twitter’s failure to seek consent before paying $7.75 million to whistleblower Peiter Zatko and his lawyers violated the merger agreement, which limits when Twitter can make such payments.

Twitter’s lawyers responded Monday, saying Musk’s reasoning for pulling out of the deal is “invalid and erroneous.”

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Shares of the social media company fell nearly 2% to $41.37, trading well below Musk’s $54.20 offer price.

The letter to Musk’s lawyers comes ahead of a special meeting on Tuesday, where Twitter shareholders will vote on the deal. read more

Zatko, who was fired by Twitter in January as the company’s chief security officer, last month accused the social media company of falsely claiming it had a solid security plan and making misleading statements about its defenses against hackers and spam accounts.

Musk, who also runs electric car company Tesla Inc ( TSLA.O ), has accused Twitter of misrepresenting the prevalence of spam or bot accounts on its platform and has sought to end the deal citing those grounds.

The whistleblower will appear before the US Senate Judiciary Committee on September 13 to discuss the allegations.

“With the Musk camp now allowed to include the Zatko allegations in its testimony for Delaware, tomorrow’s hearing will be closely watched by the Street,” Wedbush analysts wrote in a note.

The Twitter vs. Musk trial is scheduled to begin Oct. 17 in Delaware Chancery Court.

Musk’s lawyers were not immediately available for comment.

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Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva

Our standards: Thomson Reuters Trust Principles.

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