Twitter has threatened to take legal action after Elon Musk said he was pulling out of a $44 billion takeover deal.
The Tesla CEO has accused Twitter of breaching terms of an agreement and making “false and misleading representations”. Mr Musk has previously complained he has not received sufficient information from Twitter about the number of spam accounts and bots on the site.
However, in response, Twitter says it will sue Mr Musk to complete the merger and is “confident” the deal will be completed. Mr Musk faces having to pay a $1 billion break-up fee if he does not complete the deal. As the world’s richest man, Mr Musk is thought to be worth $219 billion.
Twitter initially sought to resist his attempts to take over the site by adopting a so-called ‘poison pill’ tactic of diluting the market with cheap shares, before later accepting his bid to take full control.
Mr Musk, whose net worth has plunged by $65 billion since he first announced the controversial plan, said he was putting it “on hold” in May. While he is already legally committed to the deal, he is seeking to void it by accusing the platform of failing to prove spam accounts make up less than 5% of its users.
A letter filed with the US Securities and Exchange Commission 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.”
However, Bret Taylor, chairman of Twitter said the company would be taking action in the US state of Delaware to force the deal through. Mr Taylor tweeted: “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.”
The court reportedly frowns upon attempts to back out of merger deals. Mr Musk and Twitter could take the battle to the courtroom, or they could reach a settlement whereby Mr Musk agrees to pay less than the $54.20 per share he initially agreed.