Twitter is contemplating legal action against Tesla and SpaceX CEO Elon Musk over his decision to terminate a $44 billion takeover deal.
As per The Hill, the microblogging site has hired a large
New York-based law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares
to sue Musk.
Twitter will file its lawsuit in Delaware next week.
Meanwhile, Musk is being represented by the law firm Quinn Emanuel Urquhart
& Sullivan.
On Saturday, Bret Taylor, Twitter's chairman said, "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. We are confident we will prevail in the Delaware Court of
Chancery."
Musk announced the termination of a $44 billion Twitter
purchase deal in a letter sent by Musk's team to Twitter earlier on Saturday.
Musk decided to suspend the deal due to multiple breaches of
the purchase agreement. The Tesla CEO's team strongly believes that the
proportion of spam and fake accounts is "wildly higher" than 5
percent, according to the letter.
"As further described below, Mr Musk is terminating the
Merger Agreement because Twitter is in material breach of multiple provisions
of that Agreement," the letter said on Friday. "
"In short, Twitter has not provided information that
Musk has requested for nearly two months notwithstanding his repeated, detailed
clarifications intended to simplify Twitter's identification, collection, and
disclosure of the most relevant information sought in Musk's original
requests."
In April, Musk reached an acquisition agreement with Twitter
at $54.20 per share in a transaction valued at approximately $44 billion
(roughly Rs. 420000 crore). However, Musk put the deal on hold in May to allow
his team to review the veracity of Twitter's claim that less than 5 percent of
accounts on the platform are bots or spam.
Back in June, Musk had openly accused the microblogging
website of breaching the merger agreement and threatened to walk away and call
off the acquisition of the social media company for not providing the data he
has requested on spam and fake accounts.
Musk alleged that Twitter is "actively resisting and
thwarting his information rights" as outlined by the deal, CNN reported,
citing the letter he sent to Twitter's head of legal, policy and trust, Vijaya
Gadde.
Musk demanded that Twitter turn over information about its
testing methodologies to support its claims that bots and fake accounts
constitute less than 5 percent of the platform's active user base, a figure the
company has consistently stated for years in boilerplate public disclosures.