Elon Musk said on Monday that if Twitter Inc (TWTR.N) fails to share data on spam and false accounts, he would back out of his $44 billion acquisition deal.
In a letter to Twitter, the billionaire restated his request for information on bot accounts and stated that he reserves all rights to terminate the merger because the company failed to provide him with the information in a “clear significant breach” of its commitments.
Twitter shares were trading at a substantial discount to Musk’s offer of $54.20 per share, indicating that investors did not anticipate the deal to close at the agreed price.
A request for comment from Twitter was not immediately returned.
This is the first time Musk has threatened to back out of the transaction in paper rather than on Twitter.
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According to the letter, “Musk feels Twitter is openly refusing to comply with its duties under the merger agreement, raising further suspicions that the firm is hiding the needed data.”
Twitter has previously dismissed Musk’s warning that the acquisition was “on pause,” claiming that the data would aid him in preparing for his ownership of Twitter and that it was not intended to conduct due diligence or resume discussions
Musk stated in May that he would put the acquisition “temporarily on hold” while waiting for Facebook to produce data on the proportion.
In response, Twitter CEO Parag Agrawal stated that the most sophisticated spam campaigns used a combination of humans and automation, and that he did not believe the calculations could be completed externally since they required both public and private information, which Twitter does not disclose.
In his letter, Musk stated that he need the data in order to perform his own research of Twitter users and that he did not trust the company’s “loose testing processes.”
Wedbush analyst Dan Ives said, “He’s attempting to get out of the Twitter transaction, and this is the first shot across the bow.”
Musk, a self-described free-speech absolutist who owns 9.6% of Twitter and is the company’s second-largest shareholder, has stated that one of his top priorities will be to eliminate “spam bots” from the platform.
Tesla Inc. (TSLA.O) CEO Elon Musk has also secured funding for the transaction and attracted notable investors such as Saudi Arabian investor Prince Alwaleed bin Talal and Sequoia Capital.
Musk’s lawyers wrote a letter to Vijaya Gadde, Twitter’s chief legal officer.
