Elon Musk terminated his agreement to buy Twitter on Friday, less than three months after reaching a deal to acquire it.
“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,” a lawyer wrote on his behalf in a letter to Twitter’s chief legal officer, according to a Securities and Exchange Commission (SEC) filing.
The letter alleged that the social media platform had rejected or ignored Musk’s requests for information he sought to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”
The letter further claimed that data that was given to Musk was “incomplete” and that it was not “sufficient to perform such an independent assessment.”
The chairman of Twitter’s board, Bret Taylor, said they would be pursing legal action.
“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,” Taylor tweeted.
The news had an impact on Twitter’s stock, which dropped 6 percent on Friday after hours, according to CNBC.
Musk, who in April reached an agreement with Twitter to buy the company for $44 billion, has previously said that acquiring the social media platform was “not a way to sort of make money” and has floated changes to Twitter that he would have liked to see, such as the inclusion of an edit button.
Republicans were excited at the prospect of Musk’s acquisition, expressing hope that he would increase free speech on Twitter, which has often led rivals with its stricter content moderation policies and was among the first social media platforms to ban former President Trump following the Jan. 6, 2021, Capitol riot. Lofgren says Cipollone ‘did not contradict the testimony of other witnesses’ in meeting with Jan. 6 panel Twitter board vows legal action after Musk drops bid
Musk said in May he would reverse Trump’s ban from Twitter, though the former president has contended he will continue using his Truth Social platform.
Democrats were more critical of the planned acquisition, with some urging Musk to pay more in taxes while others argued the funds could have been better used elsewhere.