Twitter suing Musk in move to force $44B deal
SAN FRANCISCO — Twitter sued Elon Musk on Tuesday to force the billionaire to complete his $44 billion acquisition of the company, setting the stage for a legal battle over the fate of the social media service.
Musk agreed in April to buy Twitter but declared last week that he intended to walk away from the deal. To push Musk to abide by the acquisition agreement, Twitter sued him in Chancery Court in Delaware. The court will determine whether he remains on the hook for the purchase or whether Twitter violated its obligation to provide Musk with data he requested, entitling him to walk away.
“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the company said in the suit.
To terminate the deal, Musk said that Twitter balked at handing over information about spam bots on the platform. He repeatedly said he did not believe the company’s public statements that roughly 5 percent of its active users are bots. Twitter intentionally misled the public, he said, and obstructed his efforts to get more information about how it accounts for the figures.
But Musk signed a legally binding agreement with Twitter. And in that contract, Twitter included a specific performance clause that allows it to sue to force the deal through, so long as the debt that the billionaire has corralled for the acquisition is in place.
In a letter to Musk’s lawyers, Twitter’s lawyers said that his move to terminate the deal was “invalid and wrongful” and that Musk “knowingly, intentionally, willfully and materially breached” his agreement to buy the firm. The company has said that it is confident in its figures about spam accounts.
In its suit, Twitter argued that Musk, who also leads automaker Tesla, wanted to exit the deal because of changes in the stock market that affected his wealth. (Tesla’s stock has fallen in recent months.)
Musk also broke an agreement not to publicly insult Twitter executives and he “covertly abandoned” his efforts to secure debt funding for the deal, the lawsuit said. In doing so, the social media company said he breached his obligations to use “reasonable best efforts” to get a deal done.