Twitter has sent a letter to Elon Musk, rejecting the “purported” termination by the world’s richest man of a $44 billion agreement to buy the social media platform.
The spray from twitter’s lawyers sets the tone of a legal battle between a company trying to force an individual to pay up according to a legally binding agreement..
In a regulatory filing, Twitter says Musk’s move is “invalid and wrongful” and constitutes a repudiation of his obligations under the agreement.
Twitter says it will “enforce” Musk’s obligations.
However, Musk says he was exercising his right to "terminate the Merger Agreement and abandon the transaction".
He alleges breaches by Twitter, including firing senior executives which went against the company's obligation to "preserve substantially intact the material components of its current business organisation".
Musk's filing: "Twitter is in material breach of multiple provisions of that agreement, appears to have made false and misleading representations upon which Mr Musk relied when entering into the Merger Agreement".
He also says that twitter has failed, despite repeated requests, to provide data on fake Twitter accounts.
However, the social media platform, says in its latest letter: “Twitter has breached none of its obligations under the agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect.”
And “as it has done, Twitter will continue to provide information reasonably requested by Mr. Musk under the agreement and to diligently take all measures required to close the transaction".
Legal experts say Twitter appears to be on firmer ground.
Musk will have to show that what he agreed to buy is worth substantially less than what it was represented to be.
Scott Galloway, a marketing professor who forecast the deal would collapse, says Musk is attempting to get out of an agreement that is legally binding.
At the very least, Musk will have to pay the break up fee of $1 billion, he says. But it is likely to be more.
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