Twitter has said that they will be suing Tesla CEO Elon Musk after he pulled out of the $44 billion agreement to buy the company. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” tweeted Twitter’s chairman, Bret Taylor, just after the official announcement.
“We are confident we will prevail in the Delaware Court of Chancery.”
In the latest Securities and Exchange Commission (SEC) filing, Musk’s lawyers said that the billionaire will not be going forward with the takeover due to concerns over fake users. While Twitter puts the number below five per cent, Musk was of the opinion that it was around 20 per cent of total users.
In the initial deal, both parties agreed on a termination fee in case the deal does not go through and as a result, Musk is currently in breach of the terms, and he will have to play $1 billion to Twitter.
While nothing was clearly stated by Musk and his team, Twitter believes that he is trying to avoid paying the amount as it was not mentioned anywhere in the SEC filing on Friday. As a result, a legal battle is expected between the two parties at the end of a long-drawn takeover battle.
Earlier, an internal memo sent by Twitter general counsel – Sean Edgett – told staffers to “refrain from Tweeting, Slacking, or sharing any commentary about the merger,” and that management would be “very limited on what we can share”, according to several media outlets.
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