Twitter is reportedly taking legal action against Elon Musk after the billionaire businessman indicated he was no longer interested in buying the social media company.
Since April, Musk and Twitter have been engaged in negotiations over a possible $44 billion takeover deal, but on Friday Musk announced he was backing out of the contract, citing concerns over business information Twitter had allegedly failed to provide.
In a letter sent to Twitter’s chief legal officer on Friday, Mike Ringler, Musk’s attorney, claimed that the company had not “complied with its contractual obligations” and had refused to provide important information about the company to Musk.
“Twitter has failed or refused to provide this information,” Ringler said. “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.”
Within hours of Musk’s public back-out, Twitter announced they would be taking legal action to force Musk to go through with the contract.
“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,” wrote Bret Taylor, chair of Twitter’s board of directors, in a tweet. “We are confident we will prevail in the Delaware Court of Chancery.”
One of the concerns Musk reportedly had over the merger agreement revolved around the number of spam accounts on Twitter. While the company claimed that only 5% of its monetizable daily active users were spam accounts, Musk thought the actual number was much higher from a preliminary review of the platform.
Since Musk and Twitter’s initial $44 billion agreement, which priced the company’s stock at $54.20 per share, Twitter’s stock has fallen significantly. As of the end of trading on Friday, Twitter shares sat at $36.81.
In the letter sent to Twitter by Ringler, Musk’s attorney revealed that the businessman was “considering whether the company’s declining business prospects and financial outlook constitute a Company Material Adverse Effect giving Mr. Musk a separate and distinct basis for terminating the Merger Agreement.”