In the lawsuit filed on Tuesday, Twitter’s attorneys said they seek to prevent Musk from further breaches of the agreement and to “compel the completion of the merger once the few outstanding conditions have been met.”
“In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to do his best to complete the deal,” the lawsuit reads. “Now, less than three months later, Musk is refusing to honor his obligations to Twitter and its shareholders because the agreement he signed no longer serves his personal interests.”
The deal is now likely heading for a lengthy court battle over whether Twitter can force Musk to enter into the deal and become its owner, or at least make him pay the planned billion dollar severance fee in the deal. initial agreement.
After initially saying he wanted to buy Twitter to eradicate bots, Musk has in recent weeks raised concerns (without any apparent evidence) that there are more bots on the platform than Twitter is reporting. publicly reported.
Twitter said in its Tuesday complaint that, “having staged a public spectacle to put Twitter on the line, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he – unlike all other parties subject to the Delaware contract law – is free to change your mind, trash the business, disrupt its operations, destroy shareholder value and walk away.”
He later adds that Musk’s attempts to exit the deal and his “vilification of Twitter and its staff … exposes Twitter to adverse effects on its business operations, employees, and stock price.”
Indeed, Twitter’s stock, which rallied around 4% on Tuesday after falling sharply on Monday, is trading 34% below its price on the day Twitter and Musk struck the deal, and 37% below. of Musk’s offer price, suggesting deep skepticism that the deal will go through. , at least at its original price. The sale price in the deal, $54.20 per outstanding share, represented a 38% premium to the stock price the day before Musk disclosed his stake in the company.
The document refers, for example, to Musk’s tweets in the days leading up to the deal, in which he appeared to allude to the launch of a hostile takeover through a takeover bid by tweeting “Love Me Tender ” and a blank followed by “is the Night”. He also pointed to a Monday tweet from Musk that included footage of Musk laughing and suggesting that if Twitter sued him to enforce the deal, it should reveal the bot data it had requested in court. .
“To Musk, it would appear that Twitter, the interests of its shareholders, the transaction agreed to by Musk and the legal process to enforce it constitute an elaborate joke,” the complaint states.
In the filing, Twitter took issue with several of the ways Musk accused the company of violating the acquisition agreement, including the assertion in his Friday letter that Twitter violated the agreement by letting go of two senior executives. last month. Twitter claims Musk wanted the merger agreement to state that the company could not hire or fire employees at or above the level of vice president, or “above an alleged violation of the normal course engagement,” without Musk’s consent. “Twitter managed to remove this provision before signing,” the complaint states.
Along with the lawsuit, Twitter filed a motion to expedite proceedings in the case, asking for a four-day trial on the dispute that is expected to be completed in September.
“The shipment is critical to enabling Twitter to secure its market benefit, to remedy Musk’s ongoing violations, and to protect Twitter and its shareholders from ongoing market risk and operational harm resulting from Musk’s attempt to extricate itself. of an airtight merger agreement,” the filing reads.