Impending legal war as Elon Musk backs out of $44 billion twitter deal
Elon Musk, the Tesla owner, has withdrawn from his contentious multi-billion dollar proposal to purchase Twitter, naming various gaps in the agreement, including misrepresenting facts. He seeks to evade a $1 billion closure fee, while Twitter is obstinate that Elon must complete the deal.
Twitter failed to conform to the repeated requests for information concerning the occurrence of fake bots, users, and spam accounts which was established by a legal filing made by Elon Musk’s lawyer.
As of May, Musk addressed that the deal was on hold as he endeavoured to assess the figure of fake users, bots, and spam accounts. The billionaire owner of Tesla has looked into processes to learn Twitter’s process for identifying fake accounts and working on board materials concerning calculations around the number of fake accounts and resources connected to Twitter’s financial condition. Twitter has upheld that the percentage of funds that fall under that range is 5% of all users, even though it has been specified in legal documents that this count can be higher than estimates suggest.
With a schedule of high-profile mergers and acquisitions (M&As) that happened in 2021, this twitter deal is yet to be one of the most important this year. However, his intent to withdraw from the agreed $44 billion agreement will likely spark a fierce legal battle.
Musk is trying to avoid paying the $1 billion, roughly an £830 million conclusion fee. On the other hand, the Twitter board is committed to pushing through the transaction, ultimately going through it on its original terms.
Twitter board chair Bret Taylor, while reflecting on the company’s official position, said that the Twitter board is devoted to closing the deal on the price and terms agreed upon with Mr. Elon Musk and would follow up with legal action to carry out the merger agreement.
Musk's initial agreement to purchase the company was $54.20 per share. The company’s valuation has fallen deeply due to the ongoing dialogue and, at most, when news of the Tesla CEO pulling out of the agreement. Since the deal's signing in April, Musk has also made various public statements that Twitter strictly underrates the percentage of fake accounts on its platform.
Twitter's social media network has prompted several high-profile moves, including numerous executives leaving the business and hiring suspension ahead of the deal’s completion. Musk has taken concerned about these moves, and his lawyer proposed that the company failed to seek his consent.