Twitter sues Elon Musk over bid to exit $44bn takeover deal
Twitter sued Elon Musk on Tuesday to force him to complete his $44bn takeover of the social media giant after he announced on Friday he would withdraw his bid.
“Musk’s exit strategy is a model of hypocrisy,” the lawsuit said, accusing the billionaire of making “bad faith” arguments against Twitter and carrying out “public and misleading attacks” on the company.
The suit has kicked off what could be a long legal saga regarding the failed merger. The Tesla CEO and richest man on Earth had reached a deal to buy Twitter on 25 April, offering to purchase all of the company’s shares for $54.20 each, but he began to back out over allegations of “spam” accounts on the platform.
“Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” according to the lawsuit. “Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Because the deal included a provision called a “specific performance clause”, the court could force Musk to buy the company as long as he has financing in place, which he claimed to have secured in May.
Musk could be ordered to pay $1bn for walking away, a penalty he indicated in a filing to the Securities and Exchange Commission he is seeking to evade. The SEC could levy additional penalties against Musk, including removing him from leadership of one or more of the several companies he leads, including Neuralink, Tesla, and SpaceX.
The complaint details how Musk offered to buy Twitter at a relatively high price and backed out after a market slump led to a downturn in tech stocks. In order to successfully escape the deal without penalty, Musk would
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