Elon Musk Twitter takeover deal in ‘serious jeopardy’
The planned takeover of Twitter by Elon Musk is in “serious jeopardy”, according to a report, sending shares in the company 4% lower in after-hours trading on Wall Street.
Musk’s team has stopped certain discussions around funding for the $44bn deal, according to a report in the Washington Post, citing three people familiar with the matter. The report said Musk had concluded that Twitter’s figures on spam accounts – a bone of contention in the deal – were not verifiable.
Twitter executives defended their spam policy on Thursday, citing a specialist team and automated processes that weed out 1m fake accounts a day, but the report stated that access to the company’s feed of public tweet data had still failed to satisfy Musk. Twitter has stated consistently that fewer than 5% of its daily active users are spam accounts – a figure that Musk doubts openly.
The report said a “change in direction” from Musk was likely to come soon, indicating that he will follow through on threats to attempt to walk away from the agreed deal.
However, legal experts said the world’s richest man and Tesla’s CEO will struggle to terminate the takeover without a legal fight. The agreement to buy Twitter contains clauses that include seeking “specific performance”, which means asking a court in Delaware – the US state that has jurisdiction over the deal – to order Musk to carry out the deal at the agreed price of $54.20 per share. Shares were priced at $37.10 in after-hours trading.
“Eventually, the Twitter board will tire of the shenanigans and will file a suit for specific performance in Delaware,” said Brian Quinn, an associate professor at Boston College law school.
Twitter can also demand a $1bn break fee from Musk if he attempts to renege on the
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