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Elon Musk today threatened to pull out of his $44 billion deal to buy Twitter in a letter that claimed the company violated the merger agreement by refusing to provide the data behind its spam estimates. Musk needs the data to obtain financing and prepare for the ownership transition, according to the letter sent to Twitter Chief Legal Officer Vijaya Gadde.
"Based on Twitter's behavior to date, and the company's latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company's corresponding obligations) under the merger agreement," Musk's legal team wrote in the letter to Twitter on Monday. "This is a clear material breach of Twitter's obligations under the merger agreement, and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement."
As we've previously written, Musk's offer to buy Twitter waived "business due diligence," and the Twitter board relied on that commitment when it approved the transaction and recommended that shareholders vote for it. A Twitter proxy statement told shareholders that one reason to approve the agreement is "the likelihood that other potential acquirers would require substantial due diligence, creating a delay and risk to reaching the signing of such a potential transaction."
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