Elon Musk threatened to stay away from buying Twitter for $ 44 billion, complaining that the social media company did not provide enough information about spam and fake accounts.
Musk has repeatedly criticized Twitter’s claim that less than 5% of its profitable daily active users are blatant, warning last month that its takeover “can not proceed” unless the platform provides proof.
In a letter to Twitter’s chief legal officer revealed in a regulatory filing on Monday, Musk’s lawyers in Skadden, Arps, Slate, Meagher and Flom wrote that Tesla’s head believes the company “refused to provide the information. [he] He has been asking again and again since May 9. ”
But Twitter insisted it would keep Musk in the original merger agreement. “Twitter has and will continue to share information in cooperation with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement,” a spokesman said. “We believe this agreement is for the benefit of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
Musk and Twitter have since announced employment In April, Tesla shares along with high-growth technology companies fell sharply. Observers have noted that Musk, because of the market storm, may try to find an excuse to lower the deal price or move away altogether.
Musk’s lawyers said this Twitter “Actively opposed and thwarted his information rights (and the Company’s equivalent obligations) under the merger agreement” and “this clear material breach of Twitter obligations” would allow Musk to “terminate the merger agreement”.
The letter raises the idea that financing a deal from Wall Street banks could be at risk if Twitter does not provide the requested information. “As a potential owner of Twitter, Mr. Musk is clearly entitled to the requested data to enable him to prepare for the transfer of the Twitter business to his ownership and to facilitate the financing of his transactions,” Skaden wrote in his letter.
It is not easy for Musk to evade his duty to close the deal. A financing failure may provide one track, though it still involves paying a $ 1 billion graduation fee.
Such legal maneuvers rarely move away from employee deals, but Musk may be looking for negotiations to force Twitter into a settlement that will allow him to pay to escape the company acquisition.
One senior Wall Street lawyer who is not involved in the deal said: “It’s hard to see how funding sources need this information given Twitter which has managed to raise debt and capital to date, and they are certainly not entitled to it according to their letter of commitment…. “Demanding it will make the banks want it, etc. So they can really intervene to make it a mess.”
Shares of Twitter fell 2% on Monday at $ 39.28, well below Musk’s offer price of $ 54.20.
Last month, Twitter CEO Farg Agrwal addressed Musk’s fake accounts concerns in a long thread, insisting the company shared with him an “overview” of its estimate process, but would not be able to share private data that would be necessary to duplicate the process outwardly.
In a letter on Monday, Skaden said any third party who would check the data would abide by the confidentiality agreement and that Musk would not maintain or otherwise use “competitive sensitive information” if the deal was not closed. “If Twitter is confident in its publicized spam assessments, Mr. Musk does not understand the company’s unwillingness to allow Mr. Musk to independently assess those assessments,” the lawyers added.
Another report by Hannah Murphy in San Francisco
Elon Musk threatens to abandon $44bn Twitter takeover Source link Elon Musk threatens to abandon $44bn Twitter takeover