Elon Musk said he was terminating his $44 billion deal to take over Twitter and make it private, saying the company had made “misleading claims” about the number of spam bots on the service.
Twitter has “failed to meet its contractual obligations” to provide information on how to assess the proliferation of the bots on the social media service,” Musk said in a letter to Twitter on Friday as part of a regulatory filing.
Musk has complained for months that Twitter understates the number of bots it has in its user base. The company has denied that claim, saying bots make up less than 5 percent of all users, with executives repeating in a news conference on Thursday that their estimates are correct.
The letter describes how many times Musk and his team have asked Twitter for more information about bots and haven’t received enough to answer his questions. The information “was delivered with appended strings, usage restrictions, or other artificial formatting features,” making it “minimally useful.” Musk believes the number of spam bots is significantly higher than 5 percent, he said in the letter, without providing any evidence.
Musk also argued that Twitter had failed to go about its normal business. The San Francisco-based company imposed a hiring freeze, fired top executives, and saw other large departures. “The company has not obtained parental approval for changes in the conduct of its business, including the specific changes listed above,” Musk said in the letter, calling it a “material breach” of the merger agreement.
Musk’s deal with Twitter had included a provision that the party breaking the agreement would pay a $1 billion termination fee if it fell apart, under certain circumstances. Legal experts have debated whether the dispute over spam bots is enough to allow Musk to walk away from the deal.
But Musk may not be able to get away with it simply by paying the termination fee. The merger agreement includes a specific performance provision that allows Twitter to force Musk to go through with the deal, according to the original filing. That could mean that if the deal ends up in court, Twitter could seek an order requiring Musk to complete the merger rather than receiving monetary compensation for violations.
On June 6, Twitter doubled down on its promise to hold Musk accountable for the terms of his proposed acquisition, an indication that even then the company thought he might try to blow up the deal. The company said again Thursday it would try to enforce the merger if Musk decides to contest it.
https://www.independent.ie/business/technology/elon-musk-terminates-44bn-twitter-buyout-deal-over-level-of-spam-accounts-41826257.html Elon Musk is ending Twitter’s $44 billion buyout deal over spam accounts