Elon Musk terminates $44 bn takeover deal with Twitter, legal battle begins

Finally, it's curtains down as Tech billionaire Elon Musk announced that he is officially trying to pull out of his $44 billion agreement to purchase microblogging site Twitter.

In a filing on Friday afternoon with the US Securities and Exchange Commission (SEC), Musk's team claimed he is terminating the deal because Twitter was in "material breach" of their agreement and had made "false and misleading" statements during negotiations.

"For nearly two months, Musk has sought the data and information necessary to 'make an independent assessment of the prevalence of fake or spam accounts on Twitter's platform'," Musk's legal team wrote.

"Twitter has failed or refused to provide this information," they added.

Twitter still hopes to close the deal, despite Musk's attempted termination.

Twitter board chairman Bret Taylor wrote that the company will "pursue legal action to enforce the merger agreement" and feels "confident we will prevail" in court.

Musk has been setting the stage to abandon the deal just weeks after he signed the agreement, claiming that Twitter released misleading stats about the prevalence of spam bots on its platform.

It is entirely unclear, however, that Musk can legally abandon his agreement simply because he isn't happy about the presence of spam on Twitter, something he could have investigated before signing the deal.

Twitter has gone to great lengths to show compliance with Musk's requests.

In early June, the company opened up "firehose" access to its service so that Musk could receive and analyze every tweet as it was posted. The company has also continuously tried to reassure the public that it has spam and bots under control.

On Thursday, it told the press that it was blocking over a million spam accounts per day, and in May, its CEO wrote a long thread about how Twitter determines how many of its users are bots.

Legal battle begins

In a following tweet, Twitter Chairman Bret Taylor said that the "board is committed to closing the transaction on the price and terms agreed upon with Musk and plans to pursue legal action to enforce the merger agreement".

"We are confident we will prevail in the Delaware Court of Chancery," he added.

Musk had put the deal on hold over the actual number of spammy/fake accounts and bots on the platform, and sought a reply from Twitter CEO Parag Agrawal.

On Thursday, Twitter claimed it is suspending more than 1 million spam accounts a day.

"That is indeed the real question," Musk replied on Friday.

The new figure doubled the previous update from Agrawal who said that the platform removes 500,000 spam accounts a day.

"We suspend over half a million spam accounts every day, usually before any of you even see them on Twitter. We also lock millions of accounts each week that we suspect may be spam -- if they can't pass human verification challenges (captchas, phone verification, etc)," Agrawal had tweeted in May.

In an internal memo to Twitter employees sent Friday and obtained by The Verge, the company's general counsel, Sean Edgett, told staffers to "refrain from Tweeting, Slacking, or sharing any commentary about the merger," and that management would be "very limited on what we can share".

"I know this is an uncertain time, and we appreciate your patience and ongoing commitment to the important work we have underway," Edgett wrote.

(With inputs from IANS)