Just before the weekend, Billionaire and Tesla CEO Elon Musk wrote a letter to Twitter’s board announcing he is ending his bid to purchase the company for $44 billion. The eight-page letter is succinct, with direct first and last sentences.
As further described below, Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement).
The final sentence reads:
Accordingly, for all of these reasons, Mr. Musk hereby exercises X Holdings I, Inc.’s right to terminate the Merger Agreement and abandon the transaction contemplated thereby, and this letter constitutes formal notice of X Holding I, Inc.’s termination of the Merger Agreement pursuant to Section 8.1(d)(i) thereof.
The Associated Press reported Friday that Twitter had responded to Musk’s letter on Friday, saying it will sue in order to uphold the deal. Musk has been arguing that Twitter was not honest and accurate with its information regarding how many fake “bot” accounts exist. The letter, a regulatory filing from attorney Mike Ringler, clearly explains that Musk has been seeking information about Twitter’s process for auditing the inclusion of spam and fake accounts among its daily active users.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” the letter reads. “Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”