In a letter sent out to Twitter this morning, Elon Musk's legal team has accused Twitter of resisting and thwarting Musk's information rights, owing to which the Twitter deal may not be materialized after all.
A couple of months ago, Twitter agreed to sell itself to Elon Musk for $44 billion or $54.20 per share in cash. However, a month after the acquisition, Musk put the Twitter deal on hold, citing his disagreements with Twitter's claim that less than 5% of the users are bot/fake accounts.
According to the letter, Musk has repeatedly requested Twitter to provide information on spam and fake accounts since May 9, 2022. Instead of providing what prospective buyer with what he has been asking for weeks, Twitter agreed to simply provide "additional details regarding the company's own testing methodologies." Musk's legal team has argued that Twitter is depriving the opportunity of conducting his own analysis, and therefore, Elon Musk could by rights walk away from the deal.
"Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter's business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter's business model—its active user base," the letter reads.
The letter also argued that by simply refusing to comply with its obligations, Twitter is "causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk's own analysis of that data will uncover."
Previously while requesting Twitter to provide data to analyze the number of spam and fake accounts, Musk clarified that he's committed to closing the acquisition. But as Musk's legal team has mentioned in the letter, Musk reserves the right not to consummate the transaction and his right to terminate the "merger agreement." Musk may still have to pay a billion-dollar penalty if he backs out of the deal.