Twitter Plans To Sue Elon Musk As The Tesla Chief Walks Out Of $44 Billion Deal

Twitter Inc (TWTR.N) on Monday accused Elon Musk, the world’s richest person, of “knowingly” breaching an agreement to buy the social media firm, days after the Tesla Inc chief sought to back out of the $44 billion deal.

In a letter sent to Musk, dated Sunday and filed with regulators on Monday, Twitter said it had not breached its obligations under the merger agreement as indicated by Musk on Friday for looking to end the deal. The letter said:

Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement, including their obligations to use their respective reasonable best efforts to consummate and make effective the transactions contemplated by the Agreement.

The company has planned to sue Musk to force him to complete the deal, a threat he laughed off on Monday when he sent a series of tweets joking about Twitter and its threat to enforce the agreement in court. Twitter is planning to file a lawsuit early this week in Delaware, people familiar with the matter told Reuters. 

Twitter said in the letter that the merger agreement remained in place, adding it would take steps to close the deal. 

Twitter’s shares ended down 11.3% at $32.65, a 40% discount to Musk’s $54.20 bid and the biggest daily percentage drop in more than 14 months. They rebounded less than 1% in extended trading.

Tesla’s shares closed down almost 7%.

Legal experts say the 16-year-old social media company has a strong legal case against Musk, but could opt for a renegotiation or settlement instead of a long court fight.

In May this year, Musk said the deal could not move forward because of “20% fake/spam accounts, while 4 times what Twitter claims, could be much higher. 

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