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Elon Musk has the “right not to complete” his acquisition of Twitter and the “right to terminate the merger agreement,” according to a letter from his lawyers to Twitter’s general counsel Vijaya Gadde sent Monday morning.
Why it matters: While Musk has been tweets about the deal being “on hold” for a while, this is his first official, legal suggestion that his deal to buy Twitter is anything but legally watertight.
Between the lines: The letter from Musk allegedly concerns a data dispute. Musk wants Twitter to provide him with information that will help him “facilitate his assessment of spam and fake accounts on the company’s platform.”
The big picture: Thanks to the recent decline in tech stocks, Twitter and Tesla, which is the main source of Musk’s wealth, are worth much less today than when Musk entered his initial bid of $54.20 per share. That means Musk is paying a lot for the company, with money he’ll have a hard time finding.
What they say: “Twitter has and will continue to cooperatively share information with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement,” the company said in a statement.
- “We believe this deal is in the best interest of all shareholders,” he added. “We intend to close the transaction and execute the merger agreement at the agreed price and terms.”
Ultimately: There’s no way Twitter will simply accept Musk’s assertion that he has the right to back out of the deal. If he tries to do that, things are likely to get messy.
Editor’s note: This article has been updated with a statement from Twitter.
