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Twitter calls Elon Musk’s third attempt to void acquisition ahead of key shareholder vote

Jakub Porzycki | Nurfoto | Getty Images

Twitter said Monday that payments to a whistleblower did not violate its obligations under Elon Musk’s proposed $44 billion takeover, after the billionaire sent a third letter to try to call off the deal.

The social media giant said it plans to enforce the deal and close the transaction at the price and terms agreed with Musk, according to a filing from the Securities and Exchange Commission.

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Twitter shareholders will vote Tuesday on whether or not to approve Musk’s takeover bid.

Twitter’s board of directors has previously urged its shareholders to approve the sale of the company to Musk.

On Friday, Musk’s legal team sent a letter to Twitter, in which he cited another reason for calling off the proposed acquisition. Musk’s team claimed that the multimillion-dollar payment that Twitter paid to whistleblower Peiter “Mudge” Zatko violated the terms of the deal.

Zatko last month alleged “extreme, egregious shortcomings” by the social media company regarding privacy, security and content moderation.

Musk’s latest letter is his third attempt to call off the Twitter deal.

Tesla’s CEO’s legal team first filed a notice with the SEC on July 8 to terminate the Twitter acquisition, alleging that “Twitter has failed to honor its contractual obligations.”

A follow-up letter on August 29 cited accusations by Zatko as the reason why the deal would not go through.

In Friday’s letter, Musk’s legal team said an alleged $7.75 million severance payment to Zatko from Twitter is another violation of the acquisition agreement.

Twitter said it has not breached any of its obligations.

“As was the case with both your alleged termination notices dated July 8, 2022 and August 29, 2022, the alleged termination set forth in your letter dated September 9, 2022 is void and unlawful under the agreement,” the social media giant’s legal team wrote. to Musk’s representatives.

“Twitter has not breached any of its representations or obligations under the Agreement, and upon receipt of shareholder approval from Twitter at its September 13, 2022 special meeting, all conditions precedent to the closing of the Merger will be satisfied.”

The Twitter Musk saga has become very complicated. Musk initially proposed to buy the company in April. After some resistance, Twitter agreed to the deal.

Shortly after, however, Musk started complaining that the number of fake or spam accounts on the social media platform is higher than disclosed.

Twitter and Musk will face trial in Delaware on Oct. 17 to resolve Musk’s bid to cancel his takeover of the company unless they reach a settlement first.

Musk may include Zatko’s allegations in his counter complaint.

The matter is complicated by a Tuesday shareholder vote on Twitter that could green-light the acquisition, but the lawsuit is still hanging over the deal.

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