(Fwrd Axis) — Tesla CEO Elon Musk is backing out of a $44 billion agreement to purchase social media giant Twitter, he confirmed on Friday.
Musk said in a filing that it is his belief that Twitter is in violation of multiple provisions of the agreement made on April 25, which includes the company sharing information with him about the number of fake and spam accounts on the social media website.
“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the filing states.
Twitter responded in a statement from Twitter board member Bret Taylor, who said they intend to force legal action to close the transaction.
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.
— Bret Taylor (@btaylor) July 8, 2022
Musk has been hinting for weeks that he has been unhappy with the asking price and Twitter has said that no more than 5% of the accounts on the site are fake or automated. Musk’s attorneys filed a letter that read the CEO’s agreement was made with the understanding he’d be receiving the bot information to evaluate the business.
Musk “is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the letter read.
Twitter released a statement last month that the company would continue to cooperate with Musk.
“We will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement,” the statement said. “We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
Elon Musk will likely pay the company $1 billion in fees, which was agreed upon when the deal was made. However, it was also stated if Musk broke the deal, more than the $1 billion would be needed.