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Twitter Lawyers Call Musk’s Deal Termination ‘Wrongful’ (1)

July 11, 2022, 10:01 PM

Twitter Inc.’s lawyers called Elon Musk’s termination of his $44 billion buyout agreement “invalid and wrongful” in a letter to the billionaire’s attorneys, a preliminary step by the social network in the looming legal battle over the deal.

Twitter lawyer William Savitt, of Wachtell, Lipton, Rosen & Katz, wrote to Musk’s lawyers at Skadden Arps Slate Meagher & Flom LLP, saying that backing out of the deal “constitutes a repudiation of their obligations under the agreement,” according to a copy of the July 10 letter filed with the Securities and Exchange Commission. Musk agreed to buy Twitter for $54.20 per share in late April.

“Twitter has breached none of its obligations under the agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect,” Savitt wrote. “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk parties’ obligations under the agreement.”

On July 8, Musk said he was terminating his agreement to take the San Francisco-based company private. The billionaire alleges that Twitter misrepresented user data, claiming the number of spam bots on the platform is much higher than the company has disclosed.

Musk has not offered any evidence of this claim, and Twitter has repeatedly denied this assertion. The social media company reiterated last week that the number of bots on the service was well under 5% of its total daily active users, but Musk said he has been unable to confirm this claim using the data Twitter has provided him.

Twitter Chairman Bret Taylor tweeted Friday that the company would “pursue legal action” to force Musk to complete the merger agreement. The social media company aims to file suit early this week, people familiar with the matter said on July 10.

The fight sent Twitter shares down 11% to $32.65 at Monday’s close, the worst one-day decline in more than 14 months.

The buyout agreement specifies any legal dispute over the deal must be heard in Delaware. By close of business Monday, no suit had been filed by either side over the teetering transaction.

Read more about the coming legal fight over Musk’s Twitter deal

(Updates with details on the deal starting in second paragraph.)

--With assistance from Jef Feeley.

To contact the reporter on this story:
Kurt Wagner in San Francisco at kwagner71@bloomberg.net

To contact the editors responsible for this story:
Sarah Frier at sfrier1@bloomberg.net

Jillian Ward, Andrew Pollack

© 2022 Bloomberg L.P. All rights reserved. Used with permission.