The tides may be turning on Elon Musk after failing to follow through with a multi-billion dollar deal to purchase the social media platform, Twitter.
Twitter retained a legal team from New York-based Wachtell, Lipton, Rosen & Katz LLP as it gears up to challenge Elon Musk for moving to end his acquisition of the company.
The social media giant intends to file a lawsuit in Delaware against Musk by early next week after the tech guru said he wanted to cancel the acquisition in documents filed with the Securities and Exchange Commission on Friday, sources told Bloomberg.
Twitter vowed that it would challenge Musk’s efforts to back out of the $44 billion deal. He initially offered to purchase Twitter for $54.20 a share in April.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” tweeted Twitter board Chairman Bret Taylor on Friday.
Twitter’s legal team could comprise several lawyers, including Bill Savitt and Leo Strine, who was formerly the chancellor of the Delaware Chancery Court, the report on Sunday said.
The Tesla and SpaceX CEO has been in dispute with Twitter, accusing the company of misrepresenting the number of spam bots on its platform.
In his Friday SEC filing, Musk alleged that Twitter’s public disclosures of monetizable daily active users have been “either false or materially misleading.” He also claimed that Twitter’s decision to fire its revenue product lead and general manager of consumer, as well as the decisions of three executives to resign from the company after Musk moved to acquire the company, were a breach of contract.
Musk’s withdrawal from the merger is likely to be expensive for the billionaire. Included in the terms of the merger contract is a $1 billion reverse termination fee that Musk would be obligated to pay.
Conservatives in particular were rather hopeful that Musk’s acquisition of Twitter would bring on massive positive changes after years of relentless censorship and violations of free speech rights.
A free speech absolutist, Musk hinted at the major overhauls he plans to make if the deal is to proceed.