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Despite Musk’s claims that Twitter has not complied with obligations, the social media company’s legal team said the takeover deal is still on.
Twitter’s legal team has said the social media company “breached none of its obligations” and that Elon Musk is the one who “knowingly, intentionally, wilfully and materially breached” their takeover agreement.
Following a tumultuous attempt to purchase Twitter for $44bn, the Tesla boss announced last Friday (8 July) that he plans to terminate the deal.
But the company has now assembled a legal team, which submitted an SEC filing stating that “the agreement is not terminated” and that Musk’s attempt to end the deal is “invalid and wrongful”.
Musk initially said in May that he was putting the deal “temporarily on hold” until he could see calculations that confirm Twitter’s claim that spam and fake accounts represent less than 5pc of users on the site.
Now, as he looks to back out of the deal completely, Musk has claimed that Twitter ignored his requests for this information, rejected them for reasons that “appear to be unjustified” and gave “incomplete or unusable” information.
However, Twitter board chair Bret Taylor was quick to announce plans to sue Musk to enforce the merger agreement, tweeting on Friday that the board is “committed to closing the transaction on the price and terms agreed upon with Mr Musk”.
“We are confident we will prevail in the Delaware Court of Chancery,” he added.
While there’s also a $1bn ‘break-up fee’ included in the takeover agreement, the documents filed this week indicate that Twitter plans to ensure the deal goes ahead rather than pursue the $1bn fee.
So far, Musk appears to have responded to Twitter’s legal action with a series of mocking tweets.
Twitter’s share price fell to $32.64 as trading closed on Monday (11 July), nearly 40pc below Musk’s initial deal price. According to Barron’s, analysts say this could fall even further.
While uncertainty remains over the takeover deal, the two sides could reach a settlement in which Musk makes the acquisition at a lower price.
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