The deal is off! So say Elon Musk. The world’s richest man has decided he doesn’t want to buy Twitter anymore. The official reason, according to the SEC filing, is because of “material breach of multiple provisions” of the agreement. However, I think the real reason is the market tanked shortly after Twitter accepted his offer and Twitter is no longer worth the $44 billion he offered. Shares of Twitter dropped 6% on the news.
Twitter is having none of it and board chair, Bret Taylor, tweeted they will sue Musk if he doesn’t go though with the sale.
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.
— Bret Taylor (@btaylor) July 8, 2022
It’s all very messy. The purchase contract has a $1 billion termination fee, but Musk is saying he doesn’t have to pay it because Twitter breached the contract. Twitter say Musk is the one breaching the contract by trying to walk away from it. I guess this will all be settle in court and I’m sure the lawyers on both sides are rubbing their hands with glee.