Tesla CEO Elon Musk said on Monday, 6 June, that he could walk away from his deal to acquire social media giant Twitter Inc, worth $44 billion, if the company failed to provide data on spam and fake accounts.
In a letter to Twitter, Musk’s lawyers said that the company was in “clear material breach” of its obligations and that the Tesla CEO had all rights to terminate the agreement.
This is the first time Musk has threatened to walk away from the deal in writing as opposed to airing it on Twitter‘s social media platform.
Twitter had previously downplayed Musk‘s warning that the deal was “on hold”, arguing that the data would help him prepare for his ownership of Twitter, not to carry out due diligence and reopen negotiations.
Twitter shares were down 5.5% at $38.13 and were trading at a steep discount to Musk’s offer of $54.20 per share, suggesting that investors did not expect the deal would close at the agreed price.
Twitter did not immediately respond to a request for comment.
“Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data,” according to the letter.