Musk repeats threat to end $46.5bn Twitter deal – with lawyers, not just tweets

June 6 2022

Elon Musk is prepared to terminate his takeover of Twitter, reiterating his claim that the social media biz is covering up the number of spam and fake bot accounts on the site, lawyers representing the Tesla CEO said on Monday.

Musk offered to acquire Twitter for $54.20 per share in an all-cash deal worth over $44 billion in April. Twitter's board members resisted his attempt to take the company private but eventually accepted the deal. Musk then sold $8.4 billion worth of his Tesla shares, secured another $7.14 billion from investors to try and collect the $21 billion he promised to front himself. Tesla's stock price has been falling since this saga began while Twitter shares gained and then tailed downward.

Morgan Stanley, Bank of America, Barclays, and others promised to loan the remaining $25.5 billion from via debt financing. The takeover appeared imminent as rumors swirled over how Musk wanted to make Twitter profitable and take it public again in a future IPO. But the tech billionaire got cold feet and started backing away from the deal last month, claiming it couldn't go forward unless Twitter proved fake accounts make up less than five per cent of all users – a stat Twitter claimed and Musk believes is higher.

Now, Musk has taken the issue further. In a letter addressed to Twitter's chief legal officer Vijaya Gadde, his lawyers stated their client is willing to pull out of the deal completely over this disagreement on fake accounts.

During early negotiations, Musk waived the need for any "business due diligence," and agreed to pay a $1 billion breakup fee to Twitter if he walked away from the takeover, depending on the circumstances. This latest letter could be an attempt to wriggle out paying that fee, angling for a lower price tag on the business, or just straight up ending it all.

"Mr Musk believes the company is actively resisting and thwarting his information rights (and the company's corresponding obligations) under the merger agreement," the missive, disclosed to and published by the SEC, stated.

"This is a clear material breach of Twitter's obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement."

Source : https://www.theregister.com/AMP/2022/06/06/twitter_musk_bots/