Elon Musk is terminating his $44 billion deal to buy Twitter, according to a filing the billionaire made with the US Securities and Exchange Commission yesterday.
Musk’s lawyers sent a letter to Twitter saying he is “terminating their merger agreement,” according to the filing.
But legal experts say Musk can’t just walk away from the deal. His April agreement to buy the company included a commitment to go through with the acquisition unless there was a major change to the business, and legal experts say nothing has happened to meet that threshold.
Musk has previously threatened to scuttle the deal if Twitter doesn’t give him more data to run his own analysis on how many spam bots it has, while Twitter has said it can’t give up personal information on its users – such as their names, emails and or IP addresses – that it uses to come up with its own bot numbers.
Musk and Twitter did not immediately respond to requests for comment.
It is unclear what will happen next, though experts have said a big legal battle would be likely if Musk tried to walk away. In a June statement, the company said: “We intend to close the transaction and enforce the merger agreement at the agreed price and terms.” Even if Twitter accepts his argument, Musk will probably have to pay a $1bn breakup fee.
In the letter to Twitter, Musk’s lawyers accused Twitter of having “failed or refused to” hand over information that would help Musk ascertain the true number of bots or spam accounts on the website.
“Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information,” the letter continues.
Musk shook up the social media world in April by agreeing to buy Twitter for $44bn (€43.9bn). He assembled a group of co-investors and leveraged his personal wealth to get the debt needed to finish the deal.
But shortly afterwards, a global sell-off in tech stocks eroded Musk’s net worth while making his purchase price of $54 (€53) a share look like an overvaluation of Twitter.
