Shocker: Elon Musk pulls out of the $44 bn deal, Twitter acts tough, says will sue Tesla CEO

As Elon Musk terminates his $44 billion deal to acquire Twitter, the company has issued a statement to pursue a legal action to enforce the merger agreement.

Twitter vows to sue Elon Musk as he backs out of the Twitter deal. (REUTERS)

On Friday, Elon Musk shocked everyone by announcing that he is terminating the $44 billion Twitter acquisition deal. Musk revealed that the main reason behind pulling out of the deal was the unsatisfactory information from the company regarding spam and fake accounts. However, Twitter has immediately fired back with the message that they will be pursuing a legal action to ensure that the Tesla CEO upholds the deal. As the situation develops, the gigantic acquisition deal has taken on a new flavor which is shaping up to be a long-drawn legal battle.

Soon after Musk's statement, Bret Taylor, Co-CEO and Chairman of Twitter stated in a post on the microblogging platform, “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery”.

Interestingly, Twitter could have chosen to push for and settle with a $1 billion breakup fee that was agreed upon by Musk if the acquisition failed to complete. However, it appears that Twitter instead wants to take the legal route to ensure that the acquisition deal actually happens.

Twitter to take legal action against Elon Musk

Mike Ringler, Musk's lawyer had sent a letter to the Twitter board explaining the reason behind termination of the acquisition deal. The letter complained that his client sought the information and data to ascertain the number of fake and spam accounts on the social media platform for two months without any satisfactory response. 

“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter mentioned. 

Musk also stated that the information is crucial to understand Twitter's business and financial performance and without it the merger could not be completed. 

As Twitter pushes for a legal battle, it remains to be seen which side comes out as a winner.