Elon Musk says he is terminating the $44 billion Twitter deal over ‘false and misleading representations’.
The Billionaire accused Twitter bosses of refusing to hand over details about the number of spam bots on its site, in a letter announcing that he was ending the deal.
Bret Taylor, Twitter’s board chair said the company is still committed to closing the deal at the agreed-upon price and plans to pursue legal action to enforce the agreement.
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The Mail Online reports: Musk blasted the social media giant for refusing to ‘comply with its contractual obligations’ throughout the acquisition process.
He also claimed the company had failed to operate normally over the past two months as it froze its hiring process and fired senior staff.
But Twitter immediately hit back, with its chairman revealing the firm planned to force through the blockbuster takeover through the courts.
Speaking to DailyMail.com, Ann Lipton, a professor of corporate governance at Tulane Law School, said: ‘At least based on public reporting, his position is quite weak, legally. But that doesn’t mean he can’t credibly threaten to create major litigation headaches for Twitter that could cause matters to drag on for years.’
Lipton continued: ‘What I can’t really figure out is his endgame; Twitter might be willing to settle for a small price reduction just to spare the time and expense, but it’s not obvious to me that’s what Musk wants.’
The professor added: ‘If he wants to walk away completely (possibly paying the break fee of $1 billion), or if he wants a much bigger price cut, that’s the kind of thing Twitter should be willing to dig its heels in over.’
Bret Taylor, Twitter’s chairman, tweeted the board was ‘committed to closing the transaction’ under the current terms of the deal and they were ‘confident’ they would win.
The bombshell update caused shockwaves across the business world, with the social media giant’s stocks sliding six per cent in extended trading.
It also came a day after Musk and Twitter CEO Parag Agrawal both appeared at ‘billionaire summer camp’ Sun Valley in Idaho – but it is not clear if they met.
Director of the Berkeley Center for Law and Business Adam Sterling, told DailyMail.com: ‘If this goes to the court of chancery and the court decides specific performance requiring Elon to purchase the company. If he flouts that, that’s pretty unprecedented. He’s shown willingness to things like that in the past.’
Experts speculated the move may have been a bid to drive the price down, with Musk offering $54.20 per share when it was at $36.81 on Friday night.
The Tesla founder is expected to speak at the exclusive festival on Saturday morning but he was yet to publicly comment on walking away from the deal.
