Twitter says Musk’s request to terminate the deal is invalid, writes SEC

Written by on July 12, 2022

Twitter said Monday in a letter that billionaire Elon Musk’s bid to terminate his proposed $44 billion acquisition of the social media company is “invalid and wrongful.”

Elon Musk’s lawyer Mike Ringler in a letter to the SEC on Friday cited many reasons for his decision to quit, noting that “Twitter has not complied with its contractual obligations.”

Ringler also claimed that Twitter did not provide Musk with the relevant business information he requested, as Ringler said the contract would require. Musk has previously said he wanted to assess Twitter’s claims that about 5% of its monetizable daily active users (mDAUs) are spam accounts.

However, Twitter attorney William Savitt of the law firm Wachtell, Lipton, Rosen & Katz argued in Monday’s letter that “Twitter has breached none of its obligations under the Agreement.”

In their letter which came as a response to Elon Musk’s lawyers, it wrote: “Mr. Musk and the other Musk Parties’ purported termination is invalid and wrongful, and it constitutes a repudiation of their obligations under 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.”
  • 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, including but not limited to Sections 6.3, 6.8, and 6.10”. The Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and 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 (including by taking all steps necessary to obtain a favourable outcome under the United Kingdom’s National Security and Investment Act 2021), the Bank Debt Commitment Letter, and the Equity Commitment Letter.
  • “As it has done, Twitter will continue to provide information reasonably requested by Mr. Musk under the Agreement and to diligently take all measures required to close the transaction,” they added.

The lawyers said Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the Agreement.

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