Elon Musk has accused Twitter of committing a “material breach” of his $44bn agreement to buy the company and threatened to terminate the deal, in the clearest indication yet that the world’s richest man is preparing to walk away from the takeover.
Musk’s lawyers have written to Twitter accusing it of refusing to provide sufficient information about the number of false users on the service, as part of a simmering dispute over the number of spam and fake accounts that populate the platform.
In a letter to Twitter’s chief legal officer, Vijaya Gadde, lawyers representing Musk said he believed the company was “actively resisting and thwarting” his rights to access data and information from the company under the agreement. The letter said Twitter had failed to provide the information requested by Musk since 9 May, adding that a formal response from Twitter on 1 June was insufficient.
The letter concluded with a warning that Musk reserved all his rights under the agreement, including his right to walk away from the deal and “terminate” the agreement.
This is a clear material breach of Twitter’s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” the letter said.
The formal legal letter, published by the US financial watchdog on Monday, follows a negotiation-by-tweet process undertaken by Musk in recent weeks. On 17 May he tweeted that the deal “cannot move forward” until the spam and fake account issue had been resolved.
Fake or spam accounts, known as bot accounts, are automated and not run by human users. They may use the reply function or direct messages to send adverts or scams to users, or represent attempts to influence public discourse by tweeting political propaganda.