Twitter sues Elon Musk over $44bn transaction
Move follows billionaire's attempt to back out of social media firm purchase.
Twitter has urged a Delaware court to compel Elon Musk to honour his $44 billion deal to purchase the social media platform, setting the stage for a high-stakes legal fight between the billionaire entrepreneur and the social media platform.
The Silicon Valley corporation filed the complaint in Delaware chancery court on Tuesday, just days after Musk declared his intention to abandon the acquisition, arguing Twitter violated the merger agreement by failing to share adequate information on false accounts.
In a sharply worded complaint, Twitter's attorneys stated that Musk's assertions were "pretexts and meritless." They stated that the CEO of Tesla was attempting to pull out of the transaction rather than "carry the expense" of the tech market sell-off.
“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,” the complaint said.
Musk was also accused of "a lengthy list of major contractual violations... that have thrown a fog over Twitter and its business," including putting the acquisition on hold "waiting fulfilment of fictitious conditions," breaking finance responsibilities, and abusing sensitive information.
The complaint included screenshots of multiple tweets in which Musk appeared to provoke Twitter and its leadership, which, according to Twitter's attorneys, breached an agreement not to degrade the business.
The action initiates a contentious legal battle between Twitter and one of its most active and influential users. The company's attorneys have requested an expedited trial in September.
The complaint details how the transaction between Twitter and Musk transpired, beginning with the 9.1% share he "secretly" acquired in March.
Musk allegedly informed Twitter's CEO Parag Agrawal and board chair Bret Taylor that he had three options: join the company's board, take over the firm, or launch a competitor.
Musk was given a board seat and accepted it, but days later he changed his mind and launched an unsolicited bid for Twitter, stating that he would “reconsider my position as a shareholder” if his offer was not accepted.
Musk pledged to revive Twitter's floundering economy, eliminate false accounts from the network, and implement a "free speech" mentality when he announced his aspirations for the company.
Musk's team has challenged Twitter's claim that 5% of users had false accounts and accused the company of making "materially deceptive assertions" in its public disclosures.
In its complaint, Twitter refuted the assertion of bogus accounts and called Musk's reasons for withdrawing from the agreement "a model of hypocrisy." According to the lawsuit, Musk texted Taylor in April that "purging false users" could only be done if Twitter was a private firm since "it would make the figures look bad."
Some observers have speculated that Musk may be seeking to negotiate a cheaper price for the transaction and that the parties may reach a settlement in order to avoid costly and prolonged litigation. Musk did not respond to a request for comment immediately.
Twitter's complaint also included rumours that Musk's promise to acquire the firm may have been an elaborate hoax: “For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke.”
By fLEXI tEAM