Elon Musk’s rollercoaster Twitter takeover went off the rails Friday as the billionaire’s lawyers alerted the social media company that he is “terminating” their merger agreement, according to a filing with the Securities and Exchange Commission.
When dropping his bombshell $44 billion bid in late April, Musk, a prolific Twitter user currently boasting more than 100 million followers, emphasized his commitment to “free speech” and vowed to make Twitter “better than ever.” But the deal started looking shaky weeks later, as Musk raised concerns about whether Twitter had been transparent when it came to fake or spam accounts on the platform. He said in mid-May the deal was “temporarily on hold.”
Around that time, there were questions about whether Musk could still pull off the deal as Tesla and Twitter share prices plunged. “It’s a bit of a perfect storm,” one economist told Vanity Fair. Last month, Musk again mentioned spam accounts, along with other “unresolved matters” as to why the deal wasn’t closing—even as Twitter’s board recommended shareholders approve it.
In Friday’s regulatory filing, Musk accused Twitter of being in “material breach of multiple provisions of that Agreement.” He alleged that Twitter had not “complied with its contractual obligations,” such as failing to provide data and information he requested to complete the transaction.
Musk’s stated concerns with Twitter’s handling of the process have come under scrutiny. As the Washington Post reports, “Musk skeptics have said he concocted the argument about bots simply to find a reason to get out of what he now saw as a bad deal.”
Earlier this week, Twitter said it “has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement.” Following news of Musk’s filing, Twitter said it will sue to complete the merger and is “confident” it will prevail, according to the Associated Press. Twitter chairman Bret Taylor tweeted the following:
“Musk’s move sets him up for a protracted legal battle with Twitter,” reports the New York Times, noting that “the billionaire signed a legally binding agreement in April to buy the company at $54.20 a share and had waived due diligence to get the deal done quickly.” (Musk did not immediately respond to the Times’s request for comment.) Adam Sterling, executive director of the Berkeley Center for Law and Business, told the paper, “I imagine this will go to court and eventually end in some sort of settlement that allows both sides to save face.”
This article was updated as news developed.