WASHINGTON – Twitter will make Elon Musk buy the company – even though he has attempted to pull out of the deal, it has said.
Mr Musk announced in legal documents on Friday that he would be cancelling his attempt to buy Twitter for $44bn (£36.6bn). He believed Twitter misled him over the scale of bots and fake accounts on the platform and that the deal was void as a result, his lawyers wrote.
But Twitter says that it considers the deal to still be active and that it will be requiring Mr Musk to buy the company as previously discussed.
“The Twitter 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,” tweeted Bret Taylor, Twitter’s chairman. “We are confident we will prevail in the Delaware Court of Chancery.”
Mr Musk’s letter made clear that his lawyers considered the agreement to be cancelled because of what he believes to be a failure to provide detailed information about fake accounts and Twitter’s measures of daily active users.
It closed by confirming that his lawyers intended to terminate the agreement and abandon the transaction.
But Mr Taylor’s tweet indicates that Twitter will be fighting that decision, and forcing Mr Musk to uphold the agreement.
The merger agreement includes a $1bn breakup fee that was supposed to be paid by Mr Musk to Twitter in case the deal did not go through. But Mr Taylor’s tweet suggests that it will instead push for the deal to be completed.
In a letter to the Securities and Exchange Commission, Mr Musk said Twitter has “not complied with its contractual obligations” surrounding the deal, namely giving him enough information to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform”.
Mr Musk‘s flirtation with buying Twitter appeared to begin in late March. That is when Twitter said he contacted members of its board – including co-founder Jack Dorsey – and told them he was buying up shares of the company and was interested in either joining the board, taking Twitter private or starting a competitor.
Then, on 4 April, he revealed in a regulatory filing that he had become the company’s largest shareholder after acquiring a 9 per cent stake worth about $3bn.
At first, Twitter offered Mr Musk a seat on its board. But six days later, Mr Agrawal tweeted that Mr Musk would not be joining the board after all. His bid to buy the company came together quickly after that.
Mr Musk had agreed to buy Twitter for $54.20 per share, inserting a “420” marijuana reference into his offer price. He sold roughly $8.5bn worth of shares in Tesla to help fund the purchase, then strengthened his commitments of more than $7bn from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
Inside Twitter, Mr Musk‘s offer was met with confusion and falling morale, especially after he publicly criticised one of Twitter’s top lawyers involved in content-moderation decisions.
As Twitter executives prepared for the deal to move forward, the company instituted a hiring freeze, halted discretionary spending and fired two top managers.
The San Francisco company has also been laying off staff, most recently part of its talent acquisition team.
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