Twitter says it will sue Elon Musk after he sends letter seeking to end $44B acquisition deal
Elon Musk’s tumultuous $44 billion US bid to purchase Twitter is on the snapping point after the Tesla CEO despatched a letter to Twitter’s board saying he’s terminating the acquisition.
The chair of Twitter’s board, Bret Taylor, tweeted Friday that the board is “dedicated to closing the transaction on the worth and phrases agreed upon with Mr. Musk and plans to pursue authorized motion to implement the merger settlement. We’re assured we are going to prevail within the Delaware Court docket of Chancery.”
Twitter may have pushed for a $1 billion US breakup fee Musk agreed to pay beneath these circumstances. As a substitute, it appears able to struggle over the deal, which the corporate’s board has authorised and CEO Parag Agrawal has insisted he needs to consummate.
The attainable unraveling of the deal is simply the most recent twist in a saga between the world’s richest man and one of the influential social media platforms.
A lot of the drama has performed out on Twitter, with Musk — who has greater than 95 million followers — lamenting that the corporate was failing to reside as much as its potential as a platform totally free speech.
On Friday, shares of Twitter fell 5 per cent to $36.81 US, effectively beneath the $54.20 US that Musk had supplied to pay. Shares of Tesla, in the meantime, climbed 2.5 per cent to $752.29 US.
In a letter to the Securities and Change Fee, Musk stated Twitter has “not complied with its contractual obligations” surrounding the deal, specifically giving Musk sufficient data to “make an impartial evaluation of the prevalence of faux or spam accounts on Twitter’s platform.”
Main shareholder
Musk’s flirtation with shopping for Twitter appeared to start in late March. That is when Twitter has stated he contacted members of its board — together with co-founder Jack Dorsey — and advised them he was shopping for up shares of the corporate and curious about both becoming a member of the board, taking Twitter non-public or beginning a competitor.
Then, on April 4, he revealed in a regulatory submitting that he had turned the corporate’s largest shareholder after buying a 9 per cent stake value about $3 billion US.
At first, Twitter supplied Musk a seat on its board. However six days later, Twitter CEO Parag Agrawal tweeted that Musk would not be becoming a member of the board in spite of everything. His bid to purchase the corporate got here collectively rapidly after that.
Calling himself a “free speech absolutist,” Elon Musk’s Twitter takeover deal is reigniting the talk round freedom of speech on social media platforms. Some concern that beneath Musk’s possession, Twitter might be exploited as a platform to unfold disinformation and monitor critics.
Musk had agreed to purchase Twitter for $54.20 US per share, inserting a “420” marijuana reference into his provide worth.
He bought roughly $8.5 billion US value of shares in Tesla to assist fund the acquisition, then strengthened his commitments of greater than $7 billion US from a various group of buyers together with Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
Inside Twitter, Musk’s provide was met with confusion and falling morale, particularly after Musk publicly criticized considered one of Twitter’s high attorneys concerned in content-moderation selections.
As Twitter executives ready for the deal to maneuver ahead, the corporate instituted a hiring freeze, halted discretionary spending and fired two high managers. The San Francisco firm has additionally been shedding workers, most lately a part of its expertise acquisition group.
