Twitter’s message to Elon Musk after his attempt to bail on his $44 billion agreement to buy the company: we’ll see you in court.
“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,” tweeted Twitter’s chairman, Bret Taylor, less than an hour after Musk’s legal team said he wanted out of the deal in a filing with the Securities and Exchange Commission. “We are confident we will prevail in the Delaware Court of Chancery.”
If you’ve been following the twists and turns of this deal, it’s not a surprise that Twitter plans to put up a fight. Soon after Musk said he would buy Twitter and take it private, he began laying the groundwork for why he could back out, claiming that Twitter wasn’t being forthcoming about the number of bots on the platform. Twitter has insisted to Musk and the public that it has bots under control and that it intends to enforce the merger agreement.
When Musk and Twitter first signed the deal, both sides agreed to pay a $1 billion termination fee in the event that either backed out for specific reasons. Musk agreed to pay the fee if he isn’t able to secure the funding he needs to complete the takeover — which, so far, he hasn’t. And Twitter agreed to pay the fee if it found another buyer or its board recommended that stockholders vote against Musk’s offer.
Since Musk is claiming that Twitter breached the terms of the deal by not being forthcoming about critical business information as it pertains to bots, it’s clear he is trying to get out without paying anything. The breakup fee isn’t mentioned in the filing with the SEC on Friday outlining his rationale for backing out of the deal.
With Twitter saying it’s going to put up a fight to make Musk pay up, this already-crazy deal could soon turn into a protracted, messy legal battle. In an internal memo to Twitter employees sent Friday and obtained by The Verge, the company’s general counsel, Sean Edgett, told staffers to “refrain from Tweeting, Slacking, or sharing any commentary about the merger,” and that management would be “very limited on what we can share.”
“I know this is an uncertain time, and we appreciate your patience and ongoing commitment to the important work we have underway,” Edgett wrote.
Update June 8th, 7:45PM ET: Added details of internal Twitter memo to employees.