Elon Musk, the chief executive officer of Tesla and the world’s richest person, said on Friday he was terminating his $44 billion deal to buy Twitter because the social media company had ‘breached multiple provisions of the merger agreement’.
In a filing, Musk’s lawyers said, “Twitter is in ‘material breach of multiple provisions’ of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” it said.
Ever since Musk announced his plan to purchase Twitter back in April, the billionaire CEO has accused the social media company of inflating its user base with spam accounts.
The filing also said that the micro-blogging site had ‘failed to respond to multiple requests for information on fake or spam accounts on the platform, as well as letting go of executives and recruiters’, hinting at the at the mass layoff that took place at Twitter yesterday, on July 8.
Musk’s decision is likely to result in a legal tussle between the billionaire and Twitter, with the latter hoping that court proceedings will start in a few weeks and be resolved in a few months.
Shortly following the news of Musk’s plan to pull out of the deal, Twitter’s Chairman Bret Taylor took to the platform to confirm the company sought legal means. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” he said.
As Twitter issued a statement vowing to take legal action against Musk, Twitter employees across various departments seem to be more worried about their future in the company. Many of them have also started coming out on the microblogging platform, expressing their concerns.
A Twitter employee tweeted that they felt the road ahead is going to be more dreadful. “I just don’t believe it’s actually over”, he said.
Another user whose Twitter bio claims that he works on Twitter’s developer products said, “End of season one - what a cliff-hanger!"
Another Twitter employee lamented, "If only this wasn't the start of a long-drawn-out court battle that will just end up lowering the purchase price and continuing the circus for another indefinite amount of time’.
Employees' anxiety also stems from the fact that the company laid off over 100 employees from its HR team only a day ago.
This however is not the first time a tech buyout is slated to fail. In recent years, especially with the Covid-19 pandemic that led to the termination of several small and big tech deals, and resulted in some parties taking their disputes to court. Xerox's attempt to acquire HP Inc. which was announced in October 2019, failed miserably as the prospective buyer in March 2020 pulled its $34 billion takeover bid in response to the coronavirus outbreak.
Earlier in 2022, Nvidia's planned $40 billion acquisition of Arm, the British semiconductor manufacturer owned by SoftBank, was officially terminated.