This story was first published on April 26 2022, and updated on July 14, 2022.
If you have been following the drama between Elon Musk and Twitter over the last few months, you would know that the billionaire recently decided that he no longer wants to purchase Twitter.
This comes just months after Musk finally succeded in his bid to acquire Twitter with a US$44 billion (SG$60.5 billion) cash deal. The deal was one of the biggest leveraged buyout deals in history and was expected to take the 16-year-old platform private so that Musk could make the platform one that celebrated free speech.
He also suggested allowing users to edit their tweets, wanted to combat the spread of bots and proposed turning the company’s San Francisco headquarters into a homeless shelter.
However, this month, Musk announced that he no longer wanted to buy the social media platform and that he was pulling out of the deal. He claimed he did this because Twitter failed to provide him with enough information on the number of spam and fake accounts on the site. In a letter filed by his lawyers, Musk said that the company had not “met its contractual obligations.”
Of course, Twitter had contingency plans in place and Musk is obligated to pay Twitter a US$1 billion “breakup fee” if the deal falls through. However, now, Twitter is taking Musk to court to force him to carry out the deal and to pay them the US$44 billion he agreed to.
Twitter filed a lawsuit in the Delaware Court of Chancery and wrote, “In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,”
“Now, less than three months later, Musk refuses to honour his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” Twitter continued.
Musk on the other hand has said, in a letter written by his lawyer, that the company is “actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement.”