Tesla CEO Elon Musk has announced on Friday he is “terminating” the merger agreement to buy Twitter, according to a filing with the SEC. The letter, dated July 8, 2022, is written by Musk’s lawyer, Mike Ringler from Skadden, Arps, Slate, Meagher & Flom LLP.
“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,” details the letter.
“While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors all data and information that Mr. Musk requests “for any reasonable business purpose related to the consummation of the transaction,” Twitter has not complied with its contractual obligations,” explains Ringler.
“For nearly two months, Mr. Musk has sought the data and information necessary to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform” (our letter to you dated May 25, 2022 (the “May 25 Letter”)). This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business,” read the 8-page letter.
“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,” detailed the letter.
Earlier today, the Washington Post cited the deal was in jeopardy, citing Twitter being difficult in providing Musk and company with information.
There’s a $1 billion breakup fee on the table and it’s unclear if Musk will be able to avoid paying the fee. News of the deal has sent shares of Twitter down nearly 8% in after-hours trading.
…developing, more to follow
