Elon Musk, Twitter Inc., according to an official filing Friday. It wants to terminate its $44 billion deal to buy its company, saying the company failed to provide the necessary data and information needed to assess the prevalence of fake or spam accounts.
According to a letter from Musk’s lawyer to securities regulators, Twitter “significantly violates many provisions of this agreement” and appears to have made “false and misleading statements” in entering into the settlement.
With the latest development, the high-risk uncertainty that Elon Musk has been continuing for two months may have ended, and a legal battle about what could happen next may have ignited the fuse.
Twitter Management Will Take Legal Actions for the Enforcement of the Agreement
Bret Taylor, Twitter’s chairman of the board, tweeted Friday afternoon that the board plans to take legal action to enforce the deal at the originally agreed price and terms.
“We are confident we will prevail in Delaware Chancery Court,” Taylor tweeted. Parag Agrawal, CEO of Twitter, also retweeted this message.
The company has said repeatedly in recent weeks that it has shared information with Musk to complete the takeover as outlined in the merger agreement, and that it intends to close and implement the deal at the agreed price and terms.
Elon Musk May Pay a $1 Billion Fine
There’s no guarantee that Musk will fully withdraw from the deal, as Twitter is expected to challenge Musk’s legal justifications.
Deal conflicts often end in negotiated settlements, which may include price reductions or one-time payments.
Musk’s lawyers stated that they expressed their concerns about three weeks after the signing of the agreement, as it is not known how many of the daily active users on Twitter are fake or spam accounts.
Musk may have to pay a breakup fee of at least $1 billion, according to the terms of the acquisition deal he signed with Twitter on April 25.
Social media giant’s acquisition deal cryptocurrency followed by investors.
*Not investment advice.