Microblogging social media platform Twitter has on Tuesday filed a law suit to compel Elon Musk to complete his $44 billion acquisition of the company.
Twitter sued Musk in Chancery Court in Delaware to push the tech billionaire to honour his obligations in acquisition agreement.
“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” Twitter said in the suit. “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.”
Musk had in April agreed to buy Twitter at the sum of $44 billion but last week announced his intention to back out from the deal. Mr Musk’s lawyers told the U.S. Securities and Exchange Commission that the Tesla CEO would no longer be paying $44 billion to seal the deal, accusing Twitter of being “in material breach of multiple provisions” of the merger deal signed months ago.
At the crux of the matter, Mr Musk claimed that Twitter failed to disclose information about spam bots, also known as fake accounts, on the platform. He maintained that he did not believe the company’s public statements that about 5% of its active users are bots.
Filings with the SEC saw Mr Musk accuse Twitter of committing “a clear material breach” of its “obligations under the merger agreement…”
Twitter is being represented by William Savitt, a lawyer at Wachtell, Lipton, Rosen & Katz. The legal firm is known for its tactics to protect companies from hostile buyers and the brain behind the poison pill that Twitter used to defend itself against Mr Musk’s hostile buyout.
Mr Musk’s legal team includes his lawyer, Alex Spiro, and a team from Skadden, Arps, Slate, Meagher & Flom.