Billionaire Elon Musk wants to end a $44 billion deal to buy Twitter, according to the letter attorneys sent on his behalf to the company’s chief legal officer on Friday.
However, Twitter chairman Brett Taylor said the company remained committed to finalizing the deal at an agreed price and plans to take legal action to enforce the settlement.
“We are confident that we will win in the Delaware Cancer Court,” Taylor wrote.
Twitter shares fell about 6% after closing business on Friday.
In the letter, discharged in a filing with the Securities and Exchange Commission. Skadden Arps attorney Mike Ringler said, “Twitter has failed to meet its contractual obligations.”
Ringler alleged that Twitter failed to provide Musk with the relevant business information. He requested because Ringler said the contract would require it. Musk has previously said he wants to evaluate Twitter’s claim that about 5% of its monetizable daily active users (MDA) are spam accounts.
“Twitter failed or refused to provide this information,” Ringler claimed. “Twitter sometimes ignores Mr. Musk’s requests, sometimes refuses them for seemingly unjustifiable reasons, also sometimes claims to comply by providing Mr. Musk with incomplete or unusable information.”
In the letter, Ringler also accused Twitter of violating the merger agreement for allegedly containing “materially inaccurate statements. The allegations are based on a preview of Musk’s spam account on the Twitter platform. Twitter says it’s impossible to count spam accounts from public information alone. Also a team of experts is checking to get to the 5% mark.
“While this analysis is ongoing, all indications are that some of Twitter’s public disclosures about its mDAU are false or materially misleading,” Ringer said.
“Despite public speculation on this matter, Mr. Musk does not waive his right to review Twitter data and information merely because he chose not to obtain such data and information before the close of the merger agreement,” Ringer added. “Indeed, he appropriately negotiated access rights and information under the merger agreement. So he could review critical data and information for Twitter’s business before funding and finalizing the transaction.”