Twitter sends letter to Elon Musk saying effort to terminate deal ‘invalid and wrongful’

The social media group’s lawyers argue that Elon Musk’s move to terminate the $US44bn takeover deal is a repudiation of his obligations under the merger agreement.

Twitter sent a letter to Elon Musk saying his effort to abandon his $US44bn takeover is “invalid and wrongful” and that Twitter hasn’t breached any of its obligations. Picture: Maja Hitij/Getty Images

Twitter sent a letter to Elon Musk saying his effort to abandon his $US44bn ($A65bn) takeover is “invalid and wrongful” and that Twitter hasn’t breached any of its obligations.

In a letter dated July 10 and made public in a regulatory filing Monday, Twitter’s lawyers said Mr Musk’s effort to terminate the deal is a repudiation of his obligations under the merger agreement.

“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,” Twitter’s lawyers wrote, responding to Mr Musk’s assertion last week that he hadn’t received the information he needed to complete his takeover of the social-media platform.

Twitter’s lawyers said the agreement isn’t terminated, the bank and equity commitments remain in effect, and demanded that Mr Musk comply with their obligations.

“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,” William Savitt wrote in the letter.

An attorney for Mr Musk didn’t immediately respond to a request for comment. The letter, from Twitter’s lawyers at Wachtell, Lipton, Rosen & Katz, sets the stage for a legal battle in what could become one of the most unusual courtroom fights in corporate takeover history: a spurned acquisition target that never sought to be bought potentially trying to force the buyer who soured on the deal to see it through.

Mr Musk’s decision to try to abandon the deal was conveyed Friday in a regulatory filing from his lawyer. The Tesla chief executive accused Twitter of not providing data needed to verify the amount of spam on the platform and argued the company was making critical changes to the ordinary running of the business without his consent, such as imposing a hiring freeze and lay-offs.

Bret Taylor, chairman of Twitter’s board of directors, tweeted Friday afternoon that the board plans to pursue legal action to enforce the deal at the price and terms originally agreed upon.

“We are confident we will prevail in the Delaware Court of Chancery,” Mr Taylor tweeted. Parag Agrawal, Twitter’s CEO, retweeted the message.

In the letter disclosed Monday, Twitter’s lawyer said, “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk parties’ obligations under the agreement.”

—Rebecca Elliott contributed to this article.

The Wall Street Journal