UPDATED with Twitter lawyers’ letter, closing stock price. Lawyers for Twitter called Elon Musk’s planned termination of his $44 billion takeover of the social media firm “invalid and wrongful” in a letter disclosed to the SEC after the close of today’s trading.
William Savitt of the law firm Wachtell, Lipton, Rosen & Katz asserted that Twitter had lived up to its end of the bargain. Since the surprise acquisition was finalized last April, it has descended into a legal morass, with expectations for a protracted battle to come.
The withdrawal by Musk and his backers is “invalid and wrongful, and it constitutes a repudiation of their obligations under the agreement,” Savitt wrote. Countering Musk’s attorneys’ claims in their own letter last Friday as the deal crumbled, he added, “Twitter has breached none of its obligations under the agreement.” He added that Musk and his deal partners “have knowingly, intentionally, willfully, and materially breached the agreement.”
The deal has not been called off, Savitt continued, citing bank debt and equity commitments, and therefore “Twitter demands that Mr. Musk and the other Musk parties comply with their obligations under the agreement.”
As it has done, Twitter will continue to provide information reasonably requested by Mr. Musk under the Agreement and to diligently take all measures required to close the transaction.
As the stock market took full measure of the merger drama today, Twitter shares slumped 11% to close at $32.65, well below the $54 a share that Musk had agreed to pay in the spring.
Continuing his jabs at Twitter via the very same social media platform, Musk tweeted to his nearly 101 million followers a caption-less image of a valkyrie, a figure from Norse mythology known for guiding the souls of deceased warriors. The post went up just after Twitter’s filings and official legal demands became public.
Twitter responded that its Board of Directors “is committed to closing the transaction at the price and terms agreed upon with and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.” Chairman Bret Taylor first tweeted the statement Friday and it was retweeted by CEO Parag Agraway, CFO Ned Segal, Vijava Gadde, chief legal officer and board members Patrick Pichette and Martha Lane Fox.
Musk began threatening to walk away from the late-April deal back in May. Tesla stock was falling (it’s changing hands today at at around $34) and the billionaire Tesla founder kept raising the bot, or fake account, issue. Twitter insists it has provided sufficient information. Musk’s deal includes a $1 billion breakup feel but Twitter says he needs a good reason for walking way, like financing falling through, otherwise the deal remains is legally binding. Now it looks like a Chancery Court judge will decide.
In a mocking tweet, Musk stocked a series of statements next to photos of himself laughing. “They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court.”
— Elon Musk (@elonmusk) July 11, 2022
— Elon Musk (@elonmusk) July 11, 2022