Mr. Musk’s lawyers said Twitter was “actively resisting” his requests.
In a crisp, six-paragraph letter to Twitter on Monday, lawyers for Elon Musk, the world’s richest man, made his displeasure known. Twitter was “actively resisting and thwarting” Mr. Musk’s rights while he was completing a $44 billion deal to buy the social media service, the lawyers wrote. The company was “refusing Mr. Musk’s data requests” to disclose the number of fake accounts on its platform, they said. That amounted to a “clear material breach” of the deal, the lawyers continued, giving Mr. Musk the right to break off the agreement. The letter, which was delivered to Twitter and filed with the Securities and Exchange Commission, escalated Mr. Musk’s campaign to terminate the blockbuster acquisition. After striking a deal to buy Twitter in April, Mr. Musk, 50, has repeatedly suggested that he may want to scrap the purchase. Monday’s letter featured the most direct words yet about his desire to pull out and crystallized his legal argument for doing so. It added another degree of uncertainty to whether Mr. Musk would complete the deal, even though he had waived his rights to do due diligence on Twitter when he bought it. The letter also raised the prospect of a contentious legal battle if one or the other side took the matter to court. If Mr. Musk pursued that route, the terms of the deal give Twitter the right to sue him to force a completion of the acquisition, if his debt financing for the purchase remains intact. The letter also provoked some eye-rolling. Mr. Musk, who leads the electric carmaker Tesla and the rocket company SpaceX, is famously mercurial and has often winged his wheeling and dealing, making his latest gambit not entirely unexpected.
“This is a move Twitter investors have for weeks been steeling themselves for, the moment when Elon Musk’s haphazard ruminations in tweets have been distilled into an official letter to regulators,” wrote Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown. “The takeover was always destined to be a bumpy ride.”
Twitter said the sale to Mr. Musk remained on course. “We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” a spokesman said, adding that the company “will continue to cooperatively share information with Mr. Musk to consummate the transaction.”
Behind the scenes, Twitter has shared information with Mr. Musk for about a month without any breakdown in communication, a person with knowledge of the situation said, requesting anonymity because the discussions were confidential. Sean Edgett, Twitter’s general counsel, also sent an email to employees on Monday morning reiterating the company’s commitment to closing the deal, according to a copy of the memo, which was obtained by The New York Times.
