Airship

Twitter sues Musk in an attempt to hold him to $44bn takeover deal

David Murphy

Twitter is suing Elon Musk in an attempt to try to force him to buy the company, following Musk’s decision to drop his proposed $44bn (£37bn) takeover of the firm on Friday. Musk went cold on Twitter after claiming the firm had not disclosed the number of fake accounts on the platform. The lawsuit seeks to force Musk to go ahead with the merger at the previously-agreed price of $54.20 per share. Twitter’s share price fell to just over $32 after Musk’s announcement on Friday, and currently stands at $34.06.

The language used in the deposition is robust from the start. It says: "In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done. Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests. 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. This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business. Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions.”

It goes on to say: “Musk, by contrast, has been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process. He has purported to put the deal on ‘hold’ pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.”

While the terms of the merger include a $1bn break-up fee, Twitter is determined that Musk should go through with the deal. Yesterday Twitter Chairman Brett Taylor put out a tweet saying that the lawsuit had been filed “to hold Elon Musk accountable to his contractual obligations".