Tesla chief executive officer Elon Musk said on Friday he was terminating his $US44 billion ($64b) deal for Twitter, citing material breach of multiple provisions of the agreement.
Tesla CEO Elon Musk.Credit:AP
Shares of Twitter fell 6 per cent in extended trading.
The announcement brings to an end a will-he-won’t-he saga after the world’s richest person clinched a deal for Twitter in April but then put the buyout on hold until the social media company proved that spam bots accounted for fewer than 5 per cent of its total users.
The Tesla CEO sent a letter to Twitter’s board saying he is terminating the acquisition.
Twitter could have pushed for a $US1 billion ($1.45b) breakup fee that Musk agreed to pay under these circumstances. Instead, it looks ready to fight to complete the purchase, which the company’s board has approved and CEO Parag Agrawal has insisted he wants to consummate.
In a letter to Twitter’s board, Musk lawyer Mike Ringler complained that his client had for nearly two months sought data to judge the prevalence of “fake or spam” accounts on the social media platform.
“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,” the letter said.
Musk also said the information is fundamental to Twitter’s business and financial performance, and is needed to finish the merger.
In response, the chair of Twitter’s board, Bret Taylor, tweeted that the board is “committed to closing the transaction on the price and terms agreed upon” with Musk and “plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
