A Securities and Exchange Commission (SEC) filing shows that Elon Musk has filed to exit from the multi-billion-dollar deal with Twitter over concerns about its spam bots.
“While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisers all data and information that Mr. Musk requests ‘for any reasonable business purpose related to the consummation of the transaction,’ Twitter has not complied with its contractual obligations,” reads an SEC filing dated July 8, 2022.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” the filing continued.
“Mr Musk is terminating the merger agreement because Twitter is in material breach of multiple provisions of that agreement, appears to have made false and misleading representations upon which Mr Musk relied when entering into the merger agreement, and is likely to suffer a Company Material Adverse Effect,” wrote lawyers for Musk to Twitter.
Things took a sour turn when Musk and his lawyers accused Twitter of withholding information about the number of “spam” accounts on the platform. This week, Twitter revealed that it was suspending more than 1 millioin spam accounts a day.
Twitter said on Friday that it planned to sue Musk to complete the $44 billion merger and that it was “confident” it would prevail.
“The Twitter board is committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement,” said Bret Taylor, the chair of the board at Twitter, in a tweet.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022