Twitter on Monday demanded that Elon Musk goes back to complete a proposed $44 billion takeover of the social media company, lambasting the Tesla chief’s withdrawal of his offer as ‘invalid and wrongful.’
Twitter’s preparation to sue Musk was predicated on his move to terminate his $44 billion acquisition of the social media company.
According to reports from Financial Times, the San Francisco company is preparing to file its lawsuit with the Delaware Court of Chancery against Musk early this week.
Africa Daily News, New York recalls that Musk had on Friday that he intended to end his initial deal of buying Twitter, mentioning three breaches of the merger agreement by the social media platform.
In her swift reaction on Monday, Twitter vowed to hold the billionaire to his original deal terms and price of $54.20 per share, in what could develop into a terrible legal fight that would dictate the future of the company.
Wachtell Lipton has the leading litigation practice in Delaware, where the majority of US public companies are incorporated. It defends companies in lawsuits over breach of fiduciary duty and broken merger agreements in the state.
The firm had initially defended Musk in a shareholder lawsuit brought in Delaware by Tesla shareholders who alleged that Musk had improperly bailed out SolarCity, another piece of his empire, when Tesla acquired the clean energy company in 2017.
Earlier this year, Musk was cleared by a Delaware judge of any wrongdoing in that case. He was represented by the law firm Cravath, Swaine & Moore in the 2021 trial.
Twitter declined to comment on Wachtell’s appointment, which was first reported by Bloomberg. Wachtell did not immediately respond to a request for comment.
In a regulatory filing on Friday, Musk’s team argued that Twitter had failed to provide enough information to prove that the number of fake and spam accounts on its platform stands at less than 5 per cent, as it has long estimated.
Twitter, which denies Musk’s claims, has an incentive to push the deal through or extract a larger break fee from Musk than the $1 billion already agreed.
Its share price has declined by more than 30 per cent since the Tesla chief made his offer and no other buyers have emerged.
The company has been plunged into crisis, announcing mass lay-offs and cost-cutting measures in recent weeks. Among remaining employees, morale is low because of job uncertainty and division over whether Musk, who promised to bring a “free speech” ethos to the platform, should run it.
Twitter is likely to argue that Musk’s concerns simply mask buyer’s remorse over a pricey and highly leveraged deal, amid a broader rout in tech stocks.
It is an interpretation shared by many analysts and legal experts.
