Twitter threatens to sue Elon Musk after he pulls out of $44bn takeover deal

9 July 2022, 08:27

Twitter is threatening to sue Elon Musk after he pulled the plug on a $44 billion takeover of the social media platform.

The world's wealthiest person alleged that Twitter had failed to provide enough information about the number of fake and spam accounts on its platform.

In a letter sent to the Twitter board Mr Musk said he is terminating the acquisition.

He first agreed to buy the platform in April, promising to revive its "free speech" potential.

In a statement provided to the US Securities and Exchange Commission, representatives for Mr Musk said Twitter breached terms of an agreement and "appears to have made false and misleading representations".

His representatives also said Twitter had not provided data and information that the Tesla founder had requested - specifically about fake 'bot' accounts on the platform.

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However, Twitter says it plans to sue the Tesla CEO to uphold the deal.

Bret Taylor, Twitter’s chair, said the company was “committed to closing the transaction on the price and terms agreed upon” and planned "to pursue legal action to enforce the merger agreement".

"We are confident we will prevail in the Delaware Court of Chancery," he added.

The terms of the deal require Mr Musk to pay a $1bn (£830m) break-up fee if he does not complete the transaction.

As a result of Mr Musk's decision, shares of Twitter fell 7% in extended trading, well below the $54.20 that he had offered to pay for the company back in April.

The possible unravelling of the agreement is just the latest twist in a saga between the world's richest man and one of the most influential social media sites.

Much of the drama has played out on Twitter, with Mr Musk - who has more than 95 million followers - lamenting that the company was failing to live up to its potential as a platform for free speech.

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Mr Musk's flirtation with buying Twitter appeared to begin in late March 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 interested in either joining the board, taking Twitter private or starting a competitor.

Then, on April 4, he revealed in a regulatory filing that he had became the company's largest shareholder after acquiring a 9 per cent stake worth about three billion dollars.

At first, Twitter offered Mr Musk a seat on its board.

But six days later, Twitter CEO Parag Agrawal tweeted that Mr Musk will not be joining the board after all.

His bid to buy the company came together quickly after that.

As Twitter executives prepared for the deal to move forward, the company instituted a hiring freeze, halted discretionary spending and fired two top managers.