Elon Musk, who had proposed a $44 billion acquisition of Twitter that the social media company agreed to, has stalled talks and may attempt to wriggle out of the deal by citing a concern with bot accounts on the platform.
It’s been reported by The Washington Post that the billionaire is no longer seeking funding sources to drum up money for the sale, and Twitter itself released a report saying a “change in direction” from Musk in regards to the acquisition is likely.
The company has maintained that the number of bots accounts for less than 5% of daily active users, but Musk has disputed that figure despite being given access to a private data stream. His lawyers are allegedly developing an argument that the number of bots on Twitter constitutes a “material breach” of the terms of the deal.
Twitter said through a spokesperson that “this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
They would be in a good legal position to force the deal in court due to a “specific performance” clause that states in part “the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing.”
If Musk is to walk away from the deal, it’ll be hard for him to avoid a break fee of $1 billion or more. Twitter could also accept a smaller price from Musk if they wish to avoid a long court battle, and Musk’s initial offer was reportedly much higher than the company is worth.
