Twitter sues Elon Musk over $44bn deal exit
Twitter sued Elon Musk last night for violating his $44 billion deal to purchase the social network and asked a Delaware court to force the world’s richest man to complete the takeover.
The social media group alleged that Musk had caused “irreparable harm” by breaching their deal, which it has vowed to enforce. He moved to terminate the acquisition last Friday, setting the stage for an acrimonious legal battle.
In a filing with Delaware Chancery Court, lawyers for Twitter accused Musk of committing “a long list” of contractual breaches, which they said had “cast a pall” over the company.
“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 shareholder value, and walk away,” they wrote.
Twitter, founded in 2006 and based in San Francisco, California, runs one of the world’s largest social networks. The company accepted Musk’s $54.20-a-share offer in April, after he disclosed a 9 per cent stake in the spring and turned down an invitation to join its board.
Musk, 51, has a personal fortune of some $225 billion, according to Forbes. He is one of Twitter’s most prominent users, with over 100 million followers.
The agreement was widely deemed to be in jeopardy after Musk declared in May that it was “on hold” until he had more information about so-called fake accounts on the platform. Lawyers representing him alleged that Twitter was in “material breach” of their contract as he sought to terminate it on Friday.
But in a filing released last night, the company noted there was “no diligence condition” included within the deal. His grounds for termination “lack any merit,” it argued.
Twitter accused Musk of attempting to shift the impact of the market downturn onto its shareholders by dropping the takeover. “It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect,” its lawyers wrote. “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.”