“We’ll see you in court”, was the response that Twitter gave to Elon Musk when he attempted to back out of his $44 billion deal to purchase the website.
Less than an hour after Elon Musk’s legal team said in a statement with the Securities and Exchange Commission that their client wanted to get out of the arrangement, Bret Taylor, the chairman of Twitter, posted his response.
“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.” he tweeted.
If you have been keeping up with the many developments surrounding this transaction, it should not come as a surprise to you that Twitter intends to push back. As soon as Musk announced that he would purchase Twitter and turn it into a private company, he started setting the framework for why he may back out of the deal.
He said that Twitter had been dishonest about the amount of bots that were on the platform. Twitter has made it clear to both Musk and the general public that it wants to uphold its part of the merger deal and that it has the bot problem under control.
When the agreement was initially signed by Musk and Twitter, both parties agreed to be liable for a termination charge of one billion dollars in the event that one of them pulled out of the transaction for certain circumstances.
Musk committed to pay the price in the event that he is unable to get the necessary money to complete the acquisition, which he has not been able to do as of yet. And Twitter committed to pay the fee if it found another bidder or if its board recommended that investors vote against Elon Musk’s offer to purchase the company.
Musk asserts that Twitter violated the terms of the deal by failing to disclose essential business information in relation to bots, and since he is claiming that this failure constitutes a breach of the agreement.
In the statement that he sent to the SEC on Friday describing the reasons for terminating the agreement, the breakup fee was not mentioned at any point.
Because Twitter has said that it intends to put up a fight in order to get Musk to pay up, a lengthy and complicated court battle may soon ensue over an already bizarre business transaction. Cue the fireworks.
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