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Twitter says $44bn acquisition will be completed, alleges Musk "didn’t seek non-public info"

Twitter says $44bn acquisition will be completed, alleges Musk "didn’t seek non-public info"
Photo Credit: 123RF.com
18 May, 2022
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A very public spat over Twitter’s future ownership continues, with both the company and Elon Musk, who has put his acquisition on hold after alleging an issue with fake accounts, making contradictory statements yesterday. While Musk reaffirmed that the deal “cannot move forward” until he gets the proofs that he is seeking now, Twitter hit back in a proxy statement filed with the United States Securities and Exchange Commission (SEC) to state that the SpaceX and Tesla chief did not “seek non-public information” prior to the deal – and as a result, the $44 billion acquisition move must go through irrespective of Twitter’s fake user volume.

On Tuesday, May 17, Twitter released its proxy statement with the SEC. As part of this filing, the company’s statement reads, “Prior to entry into the merger agreement, Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter.”

In other words, Twitter alleges that since Musk did not seek due diligence in the deal prior to closing it, the deal must go through now. Defending its stance in agreeing to the deal, among all the clauses furbished by Twitter in its proxy statement, the company said that it proceeded with the deal to prevent a situation where Musk could “commence an unsolicited tender offer for our common stock imminently based on his public statements and disclosures, and the fact that he would not be contractually committed to offer the per share price to all of our stockholders, or otherwise be subject to contractual obligations and commitments to complete an acquisition transaction.”

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“The Twitter Board considered the possible disruption to our business and the possible impact on stockholder value, if Mr. Musk did not pursue an acquisition or exited his stake of our common stock,” the company’s statement further added.

Elsewhere, Musk responded with yet another “deal cannot move forward” statement – in response to reports that he could now be looking to use the fake and spam accounts volume issue to try and force Twitter back to the negotiation table, and get a better deal. In a public tweet, Musk said, “20% fake/spam accounts, while 4x what Twitter claims, could be much higher.”

He added that the offer he made was “based on Twitter’s SEC filings being accurate.”

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“Yesterday, Twitter’s CEO publicly refused to show proof of (fake accounts being less than) 5%. This deal cannot move forward until he does,” Musk added.

The move leaves Twitter in a state of limbo, even as the company continues to let go of key executives in guise of being “responsible and efficient.” The company’s present CEO, Parag Agrawal, has posted multiple threads on his account of late – including attempting to defend the company’s in-house count of what percent of its publicly claimed active user base comprises fake accounts. He has also called out Musk’s attempt to make his own assessment of fake users on the platform to be erroneous, suggesting that such calculations could not be made without using Twitter’s in-house, non-public data.

Musk, however, has retained his position on the matter as of yesterday, and has even claimed that getting a cheaper deal to acquire Twitter, driven by the fake accounts issue, is “not out of the question.”

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