*Twitter has sued Elon Musk for backing out of a $44 billion takeover of the social media company.
We reported earlier, via CNN, that Musk wants to terminate his $44 billion deal to buy the social media platform — the latest in a whirlwind process in which he became the company’s biggest shareholder, turned down a board seat, agreed to buy the social media platform and then started raising doubts about going through with the deal.
Musk claimed in a regulatory filing Friday evening that he is ending the deal because Twitter is “in material breach of multiple provisions” of the original agreement, which was signed in April, according to the CNN report.
Twitter argues that the tech mogul is “required to consummate the deal in accordance with the merger agreement, per The Hollywood Reporter.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” reads the complaint filed on Tuesday in the Delaware Court of Chancery, according to THR.
Musk reportedly told Twitter in a letter earlier this month that the company was in breach of the merger agreement. He pointed to “false and misleading representations” about its bot and spam accounts, per the report. He also called out Twitter’s “declining business prospects and financial outlook” after several layoffs, a hiring freeze, and the exit of key executives.
Twitter responded to the letter by warning it would pursue legal action if the deal at the agreed-upon terms did not go through.
Per CNN, “Musk had agreed to pay Twitter $1 billion were he to walk away, but there were exceptions for “material adverse effects,” which Musk is claiming to have occurred. As such, he’s arguing that he owes Twitter nothing.”