Lawyers representing Twitter in its legal fight with would-be white knight Elon Musk have fired back at the billionaire after he told the company he wants to back out of his $44 billion deal to acquire the social network.
In a letter dated Sunday, July 10, Twitter’s outside attorneys told Musk’s legal team that “Mr. Musk’s and the other Musk Parties’ purported termination is invalid and wrongful, and it constitutes a repudiation of their obligations under the Agreement.” Twitter disclosed the communication in an SEC filing Monday.
On Friday, Musk’s lawyers informed Twitter that he was terminating the acquisition, accusing the company of breaching its contract, mainly by “dramatically understating the proportion of spam and false accounts.”
Twitter — which has for years claimed that spam and bot accounts represent less than 5% of its active user base — has said it plans to sue Musk in the Delaware Court of Chancery to enforce the terms of his takeover deal. Twitter is being repped by M&A powerhouse law firm Wachtell, Lipton, Rosen & Katz.
Musk personally responded to Twitter’s legal threat with a meme he posted Sunday night shortly after midnight ET. “They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info,” Musk’s post said. “Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court.” The meme includes four images of Musk, who is shown laughing more robustly after each point.
Twitter’s stock plummeted 11.4% Monday to $32.65 per share after the disclosure that Musk wants to walk away from the deal. Musk’s original offer for Twitter was $54.20/share.
The July 10 letter to Musk’s lawyers, signed by William Savitt of Wachtell, Lipton, Rosen & Katz, maintained that the company has done nothing to violate its agreement with Musk. Indeed, according to the letter, Musk and his team are the ones who breached the agreement.
“Contrary to the assertions in your letter, Twitter has breached none of its obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect,” Savitt’s letter said. “The purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the Agreement.”
“Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement, including their obligations to use their respective reasonable best efforts to consummate and make effective the transactions contemplated by the Agreement,” the letter continued, concluding: “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the Agreement.”
Savitt’s letter was addressed to Mike Ringler of Skadden, Arps, Slate, Meagher & Flom, which is representing Musk in the matter.