Twitter sues Elon Musk to force him to complete acquisition
Clare Duffy, CNN
(CNN) — Twitter has sued billionaire Elon Musk in an effort to force him to follow through with his deal to buy the social media company.
The lawsuit, filed in the Delaware Court of Chancery on Tuesday, comes after Musk said in a letter to Twitter’s top lawyer late Friday that he wants to terminate the blockbuster $44 billion acquisition agreement.
Musk’s lawyer alleged in Friday’s letter that Twitter is “in material breach of multiple provisions” of the deal, claiming the company has withheld data Musk requested in order to evaluate the number of bots and spam accounts on the platform. Twitter’s legal team hit back in a letter on Monday, calling Musk’s attempted termination “invalid and wrongful,” claiming that Musk himself had violated the agreement and demanding that he follow through with the deal.
In the complaint filed Tuesday, Twitter’s lawyers say they are seeking to prevent Musk from further breaches of the agreement, and to “compel consummation of the merger upon satisfaction of the few outstanding conditions.”
“In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” the complaint states. “Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Musk did not immediately respond to a request for comment from CNN.
The deal is now likely headed for a lengthy court battle to determine whether Twitter can force Musk to close the deal and become its owner, or at least get him to pay the $1 billion set out as a breakup fee in the original agreement.
After initially saying he wanted to buy Twitter to eradicate bots, Musk has in recent weeks expressed concerns (without any apparent evidence) that there are more bots on the platform than Twitter has publicly reported.
Some analysts, however, have suggested that Musk simply wants an excuse to get out of a deal that now seems overpriced following the downturn in Twitter shares and the overall tech market. Tesla shares, which Musk is relying on in part to finance the deal, have also declined sharply since he agreed to the acquisition deal.
Twitter said in its Tuesday complaint that, “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.”
Twitter’s stock, which regained around 4% on Tuesday after falling sharply on Monday, is trading nearly $20 below Musk’s offer price, suggesting deep skepticism about the deal getting done, at least at its original price.
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