Elon Musk sends second letter to terminate $44bn Twitter deal

August 30

16:07 2022

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Elon Musk, the billionaire founder of Tesla Inc., has cited recent allegations made by Peiter Zatko, a Twitter whistleblower, as a new reason to terminate his $44 billion agreement to buy the social media platform.

Zatko, Twitter’s former head of security, had alleged that the company misled government regulators and its own board about the prevalence of spam on the platform, as well as its own security protocols and internal reporting.

In July, Musk filed a notice with the U.S. Securities and Exchange Commission to terminate the Twitter acquisition over bot account data.

In a new letter dated August 29, Musk’s lawyers said the allegations in Zatko’s recent whistleblower complaint, if true, would demonstrate a breach by Twitter over provisions in the deal.

They said the facts supporting the whistleblower complaint were known to Twitter when they agreed to sell the company to Musk and when the billionaire initially sought to abandon the deal in July.

The allegations “provide additional bases to terminate the merger agreement today if the Musk parties’ termination of the merger agreement pursuant to the July 8 termination notice is determined to be invalid for any reason,” Musk’s legal team said.

“This also provides a basis for recission.”

MUSK’S TERMINATION CASE WRONG – TWITTER

In its response to the lawyers, Twitter described Musk’s termination case as wrongful under the acquisition agreement.

“It is based solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context,” the letter reads.

“Contrary to the assertions in your letter, Twitter has breached none of its representations or obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect.”

Twitter said it intended to enforce the acquisition agreement and “close the transaction on the price and terms agreed upon” with Musk.

Twitter’s legal team said Musk’s latest notice to terminate the deal is “invalid for the independent reason that Mr Musk and the other Musk Parties continue to knowingly, intentionally, willfully, and materially breach” the acquisition agreement.