The world’s richest man just caused a pretty big stir after shutting down his planned takeover of technological giants Twitter in a $44bn deal.
Elon Musk has notified Twitter’s board of directors that he’s no longer going forward with his planned takeover.
Musk shut down social media with his announcement, released Friday, July 8th, 2022.
Musk’s team said Twitter was not forthright with information on spam accounts that are in its user base, claiming it is a violation of the terms of the agreed deal.
“To the extent that Twitter has underrepresented the number of false or spam accounts on its platform, that may constitute a Company Material Adverse Effect under Section 7.2(b)(i) of the Merger Agreement,” his lawyers wrote.
Twitter has signalled it will fight this withdrawal attempt, insisting it has provided all information Musk requests.
“[We’re] 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”, Chairman of Twitter’s board of directors, Bret Taylor said.
Musk and Twitter agreed on the pricey deal months ago, but Twitter’s share price has fallen down a bit since, especially after he signaled in May that he may be pulling out of the deal.
The deal has a $1bn penalty clause to be paid by whoever scuppered it – in this case Mr Musk.