Twitter has made good its vow to sue Elon Musk over his decision to terminate the company’s $44 billion acquisition deal as it officially filed a suit in the Delaware Court of Chancery on Tuesday.
Twitter said Musk, after entering a binding merger agreement, now “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
The lawsuit marks the beginning of what could be a protracted legal battle as Twitter seeks to hold Musk to his deal to pay $54.20 per share for the company, and as Musk seeks to be let out of the agreement because of issues with spam bots or deal procedure.
Twitter said that Musk’s conduct during his pursuit of the social network was “bad faith” and accuses the Tesla CEO of acting against the deal since “the market started turning.”
What they are saying
Twitter in the lawsuit said: “Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
“This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business. Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price,” Twitter added in the lawsuit.
The suit says that Musk’s claims about why he wants to terminate the deal, including the prevalence of bots on the service, are “pretexts.”
What you should know
- Musk announced plans to buy Twitter for $54.20 per share in April. The stock was trading at just over $34 per share at Tuesday’s close, which is over 37% lower than Musk’s offer.
- On Friday, July 8, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platforms, which is fundamental to its business performance. read more
- Following the threat of a lawsuit by Twitter after announcing his decision, Musk on Monday said taking him to court would be an attempt to force him to buy Twitter.
- He believes Twitter would also be coerced in court to present all the information has been asking for about the percentage of bots on the platform.
Um?mmmmm