Elon Musk, the CEO of Tesla and the richest man in the world, announced on Friday that he was cancelling his $44 billion bid to acquire Twitter since the social several merger agreement clauses had been broken by the media industry.
Bret Taylor, the CEO of Twitter, said on the microblogging system that the board intended to take legal steps to maintain the merger agreement.
He said that the Twitter Board is committed to executing the transaction in accordance with the terms and circumstances stated in the contract with Mr. Musk.
Musk’s attorneys said in a document that Twitter has ignored or refused to reply to several information requests on phoney or spam accounts on the site, which is essential to the operation of the company.
Musk added that another reason he was leaving Twitter was that the company had broken its promise to “retain essentially unaltered the fundamental components of its current business organisation” by firing high-ranking managers and one-third of the talent acquisition team.
The 16-year-old San Francisco company and the billionaire are anticipated to fight it out in court for a long time as a result of Musk’s move.
Disputed m&as that are taken before Delaware courts often conclude in the organizations changing the terms contracts or the acquisition providing the aim a settlement to withdrawn. This happens instead of a judge ordering a deal to be completed. This is due to the fact that the target organisations typically want to move past the uncertainty surrounding their future.
According to a person aware of the development, Twitter, however, is expecting that court procedures will begin in a few weeks and conclude in a few months.
The French retailer LVMH once endangered a deal with Tiffany & Co. The American jeweller agreed to lower the acquisition price by $425 million, bringing it down to $15.8 billion.
According to Ann Lipton, department chair for faculty research at Tulane Law School, “I’d consider Twitter is well legally to state that it furnished him with all the important facts and this is a pretext to seeking for any reason to get out from the arrangement.”
In extended trading, stocks of Twitter dropped 6% to $34.58. That seems to be 36% less than that of the $54.20 each stock Elon initially agreed to pay for Twitter’s acquisition in April.
If Musk cannot complete the sale due to factors like the acquisition finance coming through or regulators opposing the deal, the contract stipulates that Twitter will receive a $1 billion break-up payment from Musk. He will not be required to pay a break-up fee if he decides to stop the contract on his own, though.
On Friday, some workers appeared to be commenting on the divorce by openly sharing memes on Twitter, including images of a rollercoaster and a baby yelling into a phone. Many employees have expressed doubt regarding Musk’s plans to relax content moderation because they are concerned about what the merger will imply for their jobs, salary, and capacity to work remotely.
