According to Bloomberg, Musk said his advisers sent a letter to Twitter on Friday formally informing it that he was terminating the acquisition agreement because the social media company had failed to provide information about the fake accounts.
Musk said the company had not “complied with its contractual obligations.” In response, the Twitter chairman responded: We will see you in court.
Musk says he will abandon acquisition of Twitter
Twitter US stocks fell 7% after the market and are now down about 5.49%.
IT House learned that Musk made an offer of $54.20 per share for the acquisition in April, for a total price of $44 billion. Shares of Twitter are down about 7 percent so far, with a market value of about $28.129 billion.
Twitter Chairman Brett Taylor said the board plans to take legal action to enforce the merger agreement.
Musk says he will abandon acquisition of Twitter
In a filing, Musk’s lawyers said Twitter’s failure or refusal to respond to repeated requests for information about false or spam accounts on the platform was critical to the company’s business performance.
“Twitter has seriously violated multiple terms of the agreement by appearing to make the false and misleading statements that Mr. Musk relied on in entering into the merger agreement,” the filing said.
The world’s richest man bought Twitter for $44 billion in April, but has since suspended acquisitions unless the company can produce evidence that spam bots account for less than 5 percent of the share.
It is worth mentioning that the terms of the deal are clear: Musk will have to pay a fee of $1 billion in the event that the transaction cannot be completed. It remains to be seen how the decision could lead to a protracted legal battle between Musk and the 16-year-old San Francisco company.