On Tuesday, Twitter Inc revealed its account of its transaction negotiations with Elon Musk, revealing that he declined to raise the concerns about the social media company’s operations that he has now cited in declaring the $44 billion acquisition “on pause.”
The account, which was included in Twitter’s proxy statement outlining what shareholders need to know to vote on the deal, paints a picture of Musk in a hurry to close the deal and makes no mention of threats Musk has made on Twitter about not closing the deal unless he can figure out how many spam accounts the platform has.
According to the proxy statement, Musk negotiated the Twitter acquisition during the weekend of April 23 and 24, without conducting any due diligence.
Musk has questioned the accuracy of Twitter’s public disclosure about spam accounts constituting fewer than 5% of its user base after signing the contract on April 25, stating they must be at least 20%. Despite Twitter’s claim that its submissions are only estimates, this is the case.
On Tuesday, Musk tweeted that Twitter CEO Parag Agrawal has refused to provide substantiation for his company’s estimate, and that the acquisition cannot proceed until he does. According to Twitter’s proxy statement, Musk made no effort to obtain information about the issue in the run-up to the purchase.
“Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter,” Twitter said in its proxy statement.
Musk would almost certainly lose in court if he tried to back out of a pact, according to legal experts. However, they claim that any legal action would be lengthy and unclear for Twitter’s business. The majority of enterprises that have defeated their acquirers in court have ended up negotiating cash settlements.
If Elon Musk does not finish the acquisition, he is contractually entitled to pay a $1 billion break-up fee, but Twitter can sue for “particular performance” to force Musk to complete the deal and obtain a settlement from him.
On Tuesday, Twitter stated that it was committed to the acquisition. At the agreed-upon price and that it will be completed in 2022.