Twitter to Litigate After Musk Aborts US$44b Acquisition

Twitter has announced plans to fight Tesla CEO Elon Musk and pursue legal action to enforce the merger agreement.

Bret Taylor, the chair of Twitter’s board, said that the company would pursue legal action against Musk in the Delaware Court of Chancery to force the deal at an agreed price of $54.20 per share.

“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 said in a tweet.

Musk announced Friday that he would pull out of his $44 billion deal with Twitter three months after he signed an agreement to buy the company and make it private.

In a letter addressed to Vijaya Gadde, Twitter’s top lawyer, Musk’s legal team said that he was terminating the agreement because Twitter made “false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement”.

“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,” Musk’s legal team said.

Legal experts suggest that Twitter might have an advantage as Musk and his legal team faces an “uphill challenge” if the deal is brought to court.

“I think we are finally going to see if Elon Musk is above the law. I am confident that in the Delaware courts the answer is no. The law is fairly clear that you cannot pull out from a deal in the manner he is seeking,” said John Coffee from Columbia Law School.


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