Billionaire Elon Musk has threatened to pull out of a $44bn deal to buy Twitter if the social media platform does not provide data he is requesting on bot and spam accounts.
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“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” they wrote.
Twitter said it intends to close the deal at the agreed price and terms.
“Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement,” the company said in a statement on Monday.
In April, the Twitter board unanimously agreed to sell the platform to Musk for $44bn, but the deal still requires the approval of shareholders.
In a statement announcing the deal at that time, Musk said “defeating the spam bots” would be one of his top priorities for the platform.
But last month, Musk said the acquisition was on hold because of the issue.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users,” Musk wrote on Twitter on 13 May. But he later added that he remains “committed” to the deal.
On Monday, experts said Musk may be looking to back out of the purchase agreement or push to reassess the value of the platform.
“It’s fairly obvious that he has buyer’s remorse and he is trying whatever to get a reduction in price, and I think he may succeed,” Dennis Dick, a proprietary trader at Bright Trading LLC, told the Reuters news agency.
“You can see the selloff in social media stocks and he has realised that he overpaid … all these are tactics just to get a reduction in price.”
Brian Quinn, a law professor at Boston College, also told the Associated Press news agency that Musk is “looking for a way out of the deal or something that will get leverage for a renegotiation of the price”.
If Musk walks away from the deal, he could be on the hook for a $1bn breakup fee, AP and Reuters reported.
Last month, Twitter CEO Parag Agrawal said the social media network estimates that fewer than 5 percent of all users are fake. But in a series of tweets, he highlighted the challenge of weeding out real people from bots and accounts being used for spam campaigns.
“The hard challenge is that many accounts which look fake superficially – are actually real people,” he wrote.
“And some of the spam accounts which are actually the most dangerous – and cause the most harm to our users – can look totally legitimate on the surface.”
In their letter on Monday, Musk’s lawyers said that if the platform is confident in its public estimates, they don’t understand the reluctance to allow him to “independently evaluate” the figures.
Aside from the finances, the push to acquire Twitter by Musk – who describes himself as a free speech absolutist – has stirred a debate around freedom of speech and the role of social media platforms in regulating the flow of information.
Last month, Musk said he would allow former President Donald Trump back on the platform.