New York (CNN Business)Elon Musk wants to cancel his deal to buy Twitter, but the social media company is having none of it.
On Friday, Musk moved to terminate the $44-billion acquisition agreement, alleging that Twitter breached the deal by failing to hand over data he says he needs to evaluate the number of bots and spam accounts on the platform. Twitter's legal representatives hit back in a letter to Musk's lawyers Sunday, calling the billionaire's claims "invalid" and demanding that Musk follow through with the takeover.
"Mr. Musk's and the other Musk Parties' purported termination is invalid and wrongful, and it constitutes a repudiation of their obligations under the Agreement," reads the letter, which was signed William Savit, a lawyer at Wachtell, Rosen, Lipton and Katz, which is representing Twitter in the dispute. The letter was disclosed in a regulatory filing Monday.
Musk has for weeks expressed concerns, without any apparent evidence, that there are a greater number of bots and spam accounts on the platform than Twitter has said publicly. In his Friday letter, his lawyer alleged that Twitter has "not complied with its contractual obligations" to provide Musk with sufficient data to evaluate the issue, despite having handed over its "firehose" of tweets on the platform.
In its Monday response, the Twitter team said that, "Twitter has breached none of its obligations," and alleged instead that Musk has "knowingly, intentionally, willfully, and materially breached the Agreement." It added that Twitter has and will continue to "provide information reasonably requested" by Musk to close the transaction.
"The Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement," the letter states.
Unless Musk backs down or a settlement is reached, the dispute appears almost certain to end up in court. Following Musk's announcement that he wanted to exit the deal, Twitter board chair Bret Taylor said in a tweet Friday that the 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."
"We are confident we will prevail in the Delaware Court of Chancery," Taylor added. It does not appear that a formal suit has yet been filed.
Meanwhile, Twitter (TWTR) stock tanked on the news of the dispute, closing down more than 11% on Monday — nearly 40% below Musk's deal price, suggesting deep skepticism about the deal going through. Many analysts have suggested that Musk may be trying to use the bot issue as a pretext to get out of a deal that appears overpriced in light of the recent market downturn. Tesla (TSLA) shares, which Musk is planning to use in part to finance the deal, have also fallen in recent weeks.
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July 12, 2022 at 05:18AM
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Twitter's legal team calls Elon Musk's attempt to exit acquisition deal 'invalid and wrongful' - CNN
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