Twitter Board To ‘Enforce’ Elon Musk Merger Agreement
Legal action ahead? Elon Musk’s takeover agreement of Twitter will be enforced says board of directors, as deal remains ‘on hold’
Elon Musk and Twitter’s board of directors could be on a collision course, after the latter stressed it will ‘enforce’ the deal.
The future of Elon Musk’s takeover bid for the company is currently in limbo, after Musk placed the deal on hold last week over concerns about Twitter’s estimate of the number of automated bots on the service.
Twitter had estimated in a filing that fewer than 5 percent of its monetisable daily active users during the first quarter were fake or spam accounts.
Musk concerns
But Musk has used this as a reason to place the deal on hold.
Musk estimates that around 20 percent of the accounts on Twitter are either fake or spam accounts, and he’s concerned that the true number could be even higher.
Industry watchers however are speculating that Musk may be looking for a lower price for the deal or to back out altogether. Indeed, the Tesla CEO recently told the All-In Summit in Miami that renegotiating the $44 billion (£36bn), $54.20 per share deal wouldn’t be “out of the question”,
“There is a “60%+ chance from our view Musk ultimately walks from the deal and pays the breakup fee,” Wedbush Securities analyst Dan Ives was quoted by CNN as saying Tuesday.
The breakup fee is reported to be $1 billion.
It should be noted that Twitter chief executive Parag Agrawal this week defended platform’s estimates of fake accounts, to which Musk responded with a poo emoji.
Musk also called for the SEC (a federal agency he hates) to evaluate Twitter’s bot user numbers, although Twitter’s bot estimates have been reported for years now.
Hello @SECGov, anyone home?
— Elon Musk (@elonmusk) May 17, 2022
Musk on Tuesday also began an informal Twitter poll asking for user feedback on bots.
Twitter claims that >95% of daily active users are real, unique humans. Does anyone have that experience?
— Elon Musk (@elonmusk) May 17, 2022
Enforced merger?
With Elon Musk refusing to proceed with the Twitter acquisition, the platform’s board of directors have now indicated they will seek to hold Elon Musk to his takeover agreement.
On Tuesday morning, Musk tweeted that “this deal cannot move forward” until his purported spam bot concerns are cleared up.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Hours after that the company filed its proxy statement for Musk’s takeover and said it wants to close the deal “as promptly as practicable.”
CNN meanwhile obtained a new statement from the board Tuesday evening that reads, “The Board and Mr. Musk agreed to a transaction at $54.20 per share. We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.”
The key words here are “Enforce the merger agreement,” prompting speculation of possible legal action.
