Elon Musk Terminates Bid to Buy Twitter Due to ‘Material Breach: Letter
Tesla CEO Elon Musk has announced he is “terminating” the merger agreement to buy Twitter, according to a filing with the SEC. The letter is written by Musk’s lawyer, Mike Ringler from Skadden, Arps, Slate, Meagher & Flom LLP.
“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,” reads the letter.
“While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors 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,” explains Ringler.
“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” (our letter to you dated May 25, 2022 (the “May 25 Letter”)). This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business,” the letter explains.
“Twitter has failed or refused to provide this information. 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,” detailed the letter.
Earlier today, reports cited the deal was on the rocks and now it appears Musk is pulling out of the deal, citing a material breach by Twitter. The Musk-Twitter $44 billion deal has a $1 billion USD termination fee on the table.
…developing, more to follow