Elon Musk has threatened to pull out of his $44 billion acquisition of Twitter, claiming that the social media business has “thwarted” his attempts to learn more about its user base.
Mr Musk said in a letter to regulators that he had the right to measure spam accounts on his own.
The letter puts an end to a spat that has been simmering for weeks since Mr Musk placed the acquisition “on hold” for more details.
Twitter has come out in defense of its figures.
Mr Musk, on the other hand, has stated that he believes spam and fraudulent accounts account for significantly more than the less than 5% of daily users reported by Twitter.
“As Twitter’s prospective owner, Mr Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model – its active user base,” The letter was written by lawyer Mike Ringler.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence in particular, Mr Musk believes the company is actively resisting and thwarting his information rights,” the letter said.
“This is a clear substantial breach of Twitter’s merger agreement requirements, and Mr Musk reserves all rights arising from it, including the right not to conclude the deal and the right to cancel the merger agreement,” according to the statement.
The squabble has cast fresh uncertainty on the takeover, which was approved by Twitter’s board of directors in April.
“In order to complete the acquisition in accordance with the terms of the merger agreement, Twitter has and will continue to cooperatively exchange information with Musk,” the firm stated in a statement.
Mr Musk forfeited usual due diligence rights in his haste to close the acquisition, according to Twitter, which added that it intended to execute the takeover at the agreed price and terms.
Mr Musk initially addressed the problem of the spam accounts on social media last month, saying the deal was on hold but he remained committed to the acquisition. If he opts out, he faces a $1 billion break-up fee and probable litigation.
According to analysts, Tesla’s CEO may be utilizing the situation to try to renegotiate the price or even walk away. They claimed Mr Musk’s decision to bring the issue up on social media was unusual, making it difficult to gauge his seriousness.
The letter is the “strongest warning yet” that Tesla founder Elon Musk is willing to walk away, according to Susannah Streeter, senior financial and markets analyst at Hargreaves Lansdown.
“This is a move Twitter investors have been anticipating for weeks: Elon Musk’s chaotic ruminations in tweets being condensed into an official letter to authorities,” she added. “However, given the increased volatility in the tech sector since Mr Musk’s offer, it’s highly likely he’s looking for a lower price, even if Twitter provides the facts sought in support of its first study.”