The world’s richest person, Elon Musk, faces a court battle after he terminated his Twitter acquisition deal.
Musk pulled out of the deal three months after he made a $44 billion buyout offer to Twitter’s board, disclosing his intention to increase his newly acquired stake from 9.2% to 100%.
Since the deal was made public, there have been disagreements over information regarding actual monetizable daily active users (mDAU) on Twitter. The board had previously released market statements claiming about 229 million users, with 5% bot accounts, prior to Musk’s offer.
However, Musk said he doubted the methodology used by Twitter to arrive at the number of users and bot accounts, threatening that if the figure was more than what was initially made public, he would terminate the deal.
He accused Twitter board of denying him access to their user data. The board eventually handed him the data in June, and on Friday, Musk wrote to the company he was pulling out of the deal cause he believes the bot accounts are more than claimed, while citing breach of agreement.
Explaining the situation around the deal, Musk’s lawyer and Skadden Arps attorney, Mike Ringler said, “Twitter has not complied with its contractual obligations”, adding that, “Twitter has failed or refused to provide this information,”
Ringler further revealed that, “Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
Musk’s intention to terminate the deal could cost him $1 billion, which is a break fee put in place to prevent both parties from pulling out of the deal. Twitter’s chairman, Bret Taylor, has threatened to sue Musk and Tesla, to ensure they comply with the acquisition agreement.
“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.” Taylor tweeted.