Twitter deal collapses - Elon Musk officially stops takeover and is sued
11.7.2022
Translation: machine translated
Elon Musk has officially withdrawn from his Twitter takeover. How many billions of US dollars will flow as a result of the breach of contract will be decided by a court in Delaware.
Elon Musk's joy at the Twitter takeover didn't last long. Shortly after the deal was announced in April, rumors surfaced that the billionaire did not want to take over the tech company after all, despite a binding signature. Last Friday, those rumors were confirmed.
Shortly before the weekend, Musk filed documents with the U.S. Securities and Exchange Commission (SEC) officially withdrawing from his Twitter acquisition. That because, according to him, the tech company had violated the terms of the acquisition agreement by making false and misleading statements about bot inventories on the platform. An accusation that Musk has repeatedly emphasized since May.
Twitter's response to Musk's retraction was prompt. That same evening, board chairman Bret Taylor announced via Twitter that the board would insist on pushing through the acquisition on the agreed terms. The tech company was taking legal action accordingly.
To that end, Twitter has already turned to a law firm that specializes in such merger deals, according to Bloomberg. The tech company plans to file a lawsuit against the world's richest man in Delaware early this week. The small state on the U.S. East Coast is the headquarters of Twitter.
Billions will flow - but how many?
According to Bloomberg, the court in Delaware would then be faced with the following consideration: Are the reasons Elon Musk has given for letting the deal with Twitter fall through enough? If the answer is yes, Musk will get off comparatively lightly. In this case, the billionaire only has to pay the break-up fee of around one billion US dollars.
However, if the court rules against him, Musk will be forced to take over Twitter anyway - at the previously agreed price of $54.20 per share, or around $44 billion. A third possible option would be for both parties to agree on a compromise and for Musk to acquire Twitter at a lower price.
Response via meme
So far, Musk has kept comparatively quiet about developments following his regulatory filing. Only on Monday morning did the billionaire post a meme on his Twitter timeline in which he mocked Twitter's announcement that it would take him to court.
Update from July 13, 2022
Late Tuesday afternoon, Twitter made good on its promise. The tech company officially filed lawsuit against Elon Musk in Delaware. Musk also commented on this development with a tweet.
Titelbild: Shutterstock
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