Elon Musk asserts his right to not buy Twitter
Elon Musk has a "right not to consummate" his acquisition of Twitter and a "right to terminate the merger agreement," according to a letter from his lawyers to the Twitter general counsel Vijaya Gadde sent Monday morning.
Why it matters: While Musk has been tweeting about the deal being "on hold" for a while, this is his first formal, legal suggestion that his agreement to buy Twitter is anything other than legally watertight.
Between the lines: The letter from Musk is ostensibly about a dispute over data. Musk wants Twitter to provide him with information that will help him "facilitate his evaluation of spam and fake accounts on the company's platform."
The big picture: Thanks to the recent rout in technology shares, both Twitter and Tesla, which is the main source of Musk's wealth, are worth much less today than they were when Musk entered his initial bid of $54.20 per share. That means Musk is overpaying for the company, with money he is going to have difficulty finding.
What they're saying: "Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," the company said in a statement.
- "We believe this agreement is in the best interest of all shareholders," it added. "We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
The bottom line: There is zero chance that Twitter will simply accept Musk's assertion that he has the right to withdraw from the agreement. If he tries to do so, things are likely to get messy.
Editor's note: This article has been updated with a statement from Twitter.