Elon Musk is attempting to cancel a deal to acquire Twitter Inc. for $44 billion and take it private, claiming the company misrepresented user data and preparing the ground for a protracted legal battle.
A Bold Move
The withdrawal is a major turning point in a half-year story that started with Musk amassing an ownership position, setting up an intricate financing scheme, and then concluding a deal in April. With a termination letter delivered on Friday, Musk claimed that the company had misled the public about the amount of automated accounts known as spam bots using its platform.
Thinking Ahead
Legal experts predicted that the legal battle, which would take place in a court that has historically disapproved of attempts to revoke merger agreements, might lead to a settlement in which Musk is compelled to purchase Twitter, possibly on modified terms.
If Twitter is successful in convincing a judge to order Musk to proceed with the acquisition, the April 25 announcement might still rank among the largest leveraged buyouts in history. In addition to a $21 billion equity commitment from the 50-year-old billionaire himself, Musk’s initial offer from lenders like Morgan Stanley contained $25.5 billion in debt and margin loan funding.