Elon Musk may have to complete $44bn Twitter takeover, legal experts say
Elon Musk could be forced by a US court to complete his $44bn takeover of Twitter, according to legal experts, despite pulling the plug on the transaction.
The Tesla chief executive told Twitter on Friday that he is terminating the deal, citing concerns over the number of spam accounts on the social media platform.
Twitter’s chairman, Bret Taylor, responded with a tweet stating that the company intended to “pursue legal action to enforce the merger agreement”.
<p lang=«en» dir=«ltr» xml:lang=«en»>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.One legal expert said he expected Twitter to file a lawsuit in Delaware, the US state that has jurisdiction over the deal, as soon as Monday.
“They will likely be asking for a declaratory judgment that they are not in violation of the contract. Also, they will ask for an order from the court that Musk specifically perform his obligations under the agreement,” said Brian Quinn, an associate professor at Boston College law school.
Under the terms of the agreement the company can ask a judge for “specific performance”, which would compel Musk to buy the company for the $54.20 a share he agreed to in April. Alternatively, the company can also seek a $1bn break fee from Musk for walking away from the deal in contravention of the agreement.
Quinn said Musk’s arguments would probably fail in court. In Friday’s letter, Musk put forward three broad arguments: that Twitter had breached the agreement by failing to provide enough information on spam accounts; that Twitter has misrepresented the number of spam
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