Elon Musk filed Friday with the SEC his intent to terminate his $44 billion acquisition of Twitter. But it will not be so simple for him to walk away. Or is this a ploy to get the social media company at a lower price?
From The Washington Post:
Musk’s lawyers accused Twitter of having “failed or refused to” hand over information that would help Musk and his team ascertain the true number of bots or spam accounts on the social media platform.
Legal experts have said Musk can’t just walk away from the deal. His April agreement to buy the company included a commitment to go through with the acquisition unless there’s a major change to the business, and legal experts say nothing has happened to meet that threshold. Musk has previously threatened to scuttle the deal if Twitter didn’t give him more data to run his own analysis on how many spam bots it has, while Twitter has said it can’t give up personal information on its users like their names, emails and IP addresses, which it uses to come up with its own bot numbers.
No sooner had the breaking news alerts about Musk’s cold feet hit inboxes and Twitter feeds than the company announced its plans to sue him:
I don’t know if there will be a lengthy fight or a quick settlement. But one thing seems certain: A big chunk of the inheritance of Musk’s nine kiddos – and counting – will likely go away if Musk really wants out.
More from The Post:
It’s unclear what will happen next, though experts have said a big legal battle would be likely if Musk tried to walk away. In a June statement, the company said: “We intend to close the transaction and enforce the merger agreement at the agreed price and terms.” Even if Twitter accepts his argument, Musk will likely have to pay a $1 billion breakup fee.
That agreed price was $54 per share. As I write this, on Friday afternoon, the after-hours trading has the price down to $34.97 a share.
Our Karoli points out Musk may not be ready to terminate the deal after all: