Elon Musk’s legal team has written to Twitter threatening to abort his $44bn acquisition after the social media company failed to satisfy his demands for more detailed information about spam and fake accounts.
Musk has been critical of Twitter’s claims that less than 5 per cent of its monetisable daily active users were bots or scammers, warning last month that his takeover was “on hold” while he sought further information.
In a letter to Twitter’s chief legal officer that was disclosed in a regulatory filing on Monday, Musk’s lawyers claimed its failure to provide more detail on bots and other fake accounts amounted to “a clear material breach” of Musk’s takeover agreement.
The letter, from lawyers at Skadden Arps, Slate, Meagher and Flom, said the Tesla chief believes Twitter has “refused to provide the information that [he] has repeatedly requested since May 9”, alleging that its refusal to explain how it detects fake accounts “is tantamount to refusing” the demands.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence in particular, Mr Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement,” the letter claims.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”
Twitter did not immediately respond to a request for comment.
Twitter’s shares were 6 per cent lower in pre-market trading on Monday at $37.63, well below Musk’s $54.20 offer price.
