Elon Musk Makes U-Turn on Twitter Acquisition
The world’s richest man, Elon Musk has said he is no longer buying Twitter, effectively killing a $44 billion deal that has been in the works for months.
Elon Musk had tendered an offer to buy 100% of Twitter for $44 billion back in April at $54.20 per share in cash which at the time was a 54% premium on the price the day he began investing in Twitter.
The offer, which was initially rejected by the Twitter board was eventually accepted leading to a series of condition precedents and triggers on both sides for the deal to have culminated.
Elon Musk notified Twitter of its decision to back out from the deal via a disclosure to the US Security and Exchange Commission stating a number of reasons why he was backing out from the deal.
Elon Musk claims Twitter has not complied with its contractual obligations to provide Mr. Musk and his advisors with all data and information that Mr. Musk requests “for any reasonable business purpose related to the consummation of the transaction,”.
He also claims that for nearly two months, he has sought the data and information necessary to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform”.
He maintained that the information was fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction with the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business.
He also claims Twitter has failed or refused to provide this information. 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.
Elon Musk also disclosed that his financial advisors at Morgan Stanley have been requesting critical information from Twitter as far back as May 9, 2022—and repeatedly since then—on the relationship between Twitter’s disclosed mDAU figures and the prevalence of false or spam accounts on the platform.
Twitter responded swiftly, denying the claims made by Musk and stating that it will do anything within its power to follow through with the deal.
Twitter said its board was “committed to closing the transaction on the price and terms agreed upon with Mr. Musk and will seek legal action to conclude the transaction.
Elon Musk is expected to pay Twitter $1 billion if he walks away from the deal. However, this is subject to conditions in the agreement which Elon Musk believes does not require that he pays any money to Twitter.