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Twitter Inc asked a Delaware court to order Musk to complete the merger at the agreed-upon $54.20 per Twitter share, according to a court filing.
Twitter Inc sued Elon Musk on Tuesday for breaching a $44 billion deal to buy the social media platform and asked a Delaware court to order the world’s richest man to complete the merger at an agreed price of $54.20 per Twitter share, according to a court filing.
“Musk apparently believes that he — unlike all other parties subject to Delaware contract law — is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value, and walk away,” the lawsuit says.
The lawsuit sets in motion what promises to be one of the biggest legal showdowns in Wall Street history, involving one of the business world’s most colorful entrepreneurs in a case that will upend settled contract language.
On Friday, Mr. Musk said he was ending the deal because Twitter had breached the deal by failing to respond to requests for information about fake or spam accounts on the platforms, which is critical to its business performance.
Mr Musk, who is chief executive of electric vehicle maker Tesla Inc, did not immediately respond to a request for comment.
The lawsuit accused Mr. Musk of a “long list” of violations of the merger agreement that “derailed Twitter and its business.”
Shares of the social media platform fell to $34.06 on Tuesday, sharply below levels above $50 where they were trading when the deal was approved by Twitter’s board in late April.
Mr Musk said he was ending the merger because of a lack of information about spam accounts and inaccurate statements, which he said constituted a “serious adverse event”. He also said the executive departures amounted to business failure in the usual way Twitter is bound to do.
Twitter said it negotiated the removal of language from the merger agreement that would have made such layoffs a violation of the normal requirement.
Twitter called the reasons cited by Mr. Musk a “pretext” that lacked merit and said his decision to leave had more to do with the stock market’s decline, particularly in technology stocks.
Shares in Tesla, the main source of Mr Musk’s fortune, have lost 30% of their value since the announcement and closed on Tuesday at $699.21.
Legal experts said that from the information that is public, it would appear that Twitter has the upper hand because of the way Mr. Musk negotiated the deal, refusing to go through traditional pre-merger procedures.
