Twitter to Accuse Elon Musk of Breaching $44B Takeover Deal
Twitter is gathering a high-profile legal team to accuse Telsa CEO Elon Musk for ending his $44B planned takeover to buy the platform, according to a report on Sunday.
Twitter says its $44 billion sale to Elon Musk is still on and it will go to court to make it happen, despite the mercurial billionaire’s declaration he is breaking it off.
Bloomberg News said that the social media giant aims to file a lawsuit against Elon Musk — who backed out of the planned takeover on Friday — early this week in Delaware, where the company is based.
Twitter has hired the law firm Wachtell, Lipton, Rosen & Katz, which is known for its work in mergers.
If successful, Twitter could force Musk to pay a $1 billion breakup fee, according to the report.
Elon Musk backed out of the deal after Twitter failed to provide information about fake accounts on the platform, court documents filed by his team claimed.
His attorneys alleged in a Friday court filing that “Twitter is in material breach of multiple provisions” of the buyout deal, and that the company “appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement.”
The Tesla boss has retained Quinn Emanuel Urquhart & Sullivan, a high-profile firm that he’s worked with before, according to Bloomberg.
The case is likely to be tried in a chancery court, where a judge who is an expert in business law will hear arguments without a jury.
The deal’s collapse came after a long-running saga. After news broke in April that Musk secured a $44 billion deal to take over Twitter, he put the buyout on hold until the social media company proved that spam and bot accounts were fewer than 5% of users who see advertising on the site.
Insiders speculated that Musk rejected on the deal because he is now paying a huge premium for the company due to a correction in tech stocks.