In the complaint filed on Tuesday, Twitter’s lawyers say they seek to prevent Musk from further violating the agreement and “enforce the completion of the merger subject to the satisfaction of the few outstanding conditions.” “In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to complete the deal,” the complaint states. “Now, less than three months later, Musk is refusing to honor his obligations to Twitter and its shareholders because the deal he signed no longer serves his personal interests.” Shortly after news of the lawsuit was filed, Musk tweeted “Oh the irony lol.” Musk did not immediately respond to a request for comment from CNN. The deal is now likely headed for a lengthy legal battle to see if Twitter can force Musk to close the deal and become its owner, or at least make him pay the $1 billion breakup fee originally set out. agreement. After initially saying he wanted to buy Twitter to weed out the bots, Musk has in recent weeks raised concerns (with no apparent evidence) that there are more bots on the platform than Twitter has publicly reported. Some analysts, however, have suggested that Musk simply wants an excuse to get out of a deal that now looks overpriced after Twitter shares and the overall tech market tumbled. Shares of Tesla ( TSLA ), which Musk is relying on in part to finance the deal, have also fallen sharply since he agreed to the buyout deal. Twitter said in its complaint on Tuesday that, “having staged a public spectacle to put Twitter in the game, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that — unlike any other party subject to Delaware contract law—is free to change his mind, wipe out the company, disrupt its operations, destroy shareholder value, and walk away.” He later adds that Musk’s attempts to back out of the deal and “undervaluing Twitter and its people … expose Twitter to adverse effects on its business, employees and stock price.” Indeed, Twitter stock, which recovered about 4% on Tuesday after falling sharply on Monday, is trading 34% below its price on the day Twitter and Musk closed the deal and 37% below its offer price Musk, indicating deep skepticism about the deal going through, at least at its original price. The sale price in the deal, $54.20 per outstanding share, represented a 38% premium over the stock’s price the day before Musk disclosed his stake in the company. Very little about the process by which Musk and Twitter pursued a deal was typical of corporate M&A standards, and Tuesday’s filing to enforce the deal — which is filled with references to tweets, memes and a nod in emoji- underlines how weird it was. The document cites, for example, Musk’s tweets in the days leading up to the deal, in which he appeared to hint at the launch of a hostile takeover bid by tweeting “Love Me Tender” and a blank followed by “it’s the night . He also pointed to a tweet from Musk on Monday that included images of Musk laughing and suggesting that if Twitter sued him to enforce the deal, he would have to disclose the bot data he was seeking in court. “To Musk, it appears that Twitter, the interests of its shareholders, the transaction to which Musk agreed, and the legal process to enforce it constitute an elaborate joke,” the complaint states. In the filing, Twitter took issue with many of the ways Musk accused the company of violating the buyout agreement, including an allegation in his letter Friday that Twitter violated the agreement by letting go of two senior executives last month. Twitter claims that Musk wanted the merger agreement to state that the company could not hire or fire employees at the vice president level or “above an alleged breach of the standard agreement” without Musk’s consent. “Twitter successfully pursued this provision before signing,” the complaint states. In conjunction with the complaint, Twitter filed a motion to expedite the case, asking for a four-day trial on the dispute to end in September. “The assignment is necessary to allow Twitter to secure the benefit of its agreement, to address Musk’s ongoing violations, and to protect Twitter and its shareholders from continued market risk and operational harm resulting from Musk’s effort to bully his way out of a tight merger deal. “, the filing states.
