Less than four months ago, Elon Musk, the world’s richest man, struck a blockbuster $44 billion deal to buy Twitter. He proclaimed that the company had “tremendous potential.”
In the months since Musk changed his tune. He sniped at Twitter’s top executives. He unleashed tweets taunting the company’s board. He complained that the social media service had too many spam accounts and that he could not get insight into the issue. He tweeted a poop emoji to express his displeasure.
And on Friday, Musk tried to back out of the acquisition altogether.
In a regulatory filing prepared by his lawyers, Musk said he wanted to terminate the Twitter deal because of a continuing disagreement over the number of spam accounts on the platform. He claimed that Twitter had not provided the information necessary to calculate the number of those accounts — which the company has said is lower than 5 percent — and that the company had appeared to make inaccurate statements.
“Twitter is in material breach of multiple provisions” of the deal agreement, Musk’s lawyers said in the filing, and the company “appears to have made false and misleading representations.”
Musk, 51, and Twitter didn’t immediately return requests for comment. The company has repeatedly said it intends “to close the transaction and enforce the merger agreement at the agreed price and terms.”
Musk’s move sets him up for a protracted legal battle with Twitter. The billionaire signed a legally binding agreement in April to buy the company at $54.20 a share and had waived due diligence to get the deal done quickly. The terms also included a $1 billion breakup fee if the agreement fell apart and a clause that gives Twitter the right to sue Musk and force him to complete or pay for the deal, so long as the debt financing, he has corralled remains intact.
Twitter’s shares fell 8 percent in after-hours trading.
This is a developing story. Check back for updates.
(The New York Times)