With Elon Musk now turning tail from his $44 billion Twitter takeover bid, Twitter is on the offensive to get the billionaire to uphold his end of the deal, which is to pay up, regardless of whether or not he’ll take ownership of the company.

“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 honor 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.”

The Eagle Wakes

In every sense of the word, Twitter is pissed. Now, the company is out for blood and wishes to make Musk cough up the necessary financing for what he’s done to their stock. Yep, he screwed them over big time. In the latest development in this chaotic fiasco, Twitter has officially launched legal action to counter Musk’s effort to scrap their deal. Apparently, Musk and his team believe that they are liable for an exit because of Twitter’s unwillingness to provide them with adequate information to prove their claims.

But Twitter’s having none of it – it has a range of examples of bad faith actions and public disclosures on Musk’s part, which it rebuts violate the original agreement. These specifically extend to:

  • Musk has acted against the proposed deal since the market started its own downturn, repeatedly breaching the merger agreement.

  • Musk has boasted publicly about violating his non-disclosure obligations under the original contract.

  • Musk has put the deal ‘on hold’ based on ‘imaginary conditions’, breaching his financing obligations in the process, as well as citing a conflict between Musk’s original reasoning to ‘rid the platform of bots’, which are now the same reason he looks to exit the deal.

There are a lot more, with Twitter only summarizing that Musk has leveled serious charges, both publicly and through lawyer letters, that Twitter has misled its investors and customers, significantly damaging the company’s prospects, in violation of the agreed terms of the acquisition. To add, Twitter also outlined, in detail, how it worked to meet all of Musk’s information requests, going beyond what obligations asked of it.

Twitter’s overview is a thorough and scathing assessment of Musk’s actions, which shows that Twitter had been taking notes, measuring its legal case carefully. In some ways, Twitter’s case reads like a list of grievances that Twitter has been waiting to air out, which it now has the opportunity to do. Twitter cites other impacts that Musk has made on the company, including notes about employee retention, which Musk also lists as another major reason for him to exit the deal.

The Wrap

There are other allegations that Twitter presses against Musk and his team, but they all boil down to the company believing that Musk has acted in bad faith and is now only looking to exit the deal because of the market downturn, greatly damaging their standing and performance.

From the get-go, many of us believed that this would all culminate in a glorious heap of rubble for both parties, but that only proves how great a teacher experience can be. Whatever happens, Twitter won’t let Musk go freely and has reiterated that there is no financing contingency and no diligence condition.

“The deal is backed by airtight debt and equity commitments.”

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Sources 

https://bit.ly/3cfvjpz