Business mogul Elon Musk has terminated the $44 billion deal to buy Twitter, according to a letter sent by a lawyer on his behalf to the company’s Chief Legal Officer, Friday.
Twitter shares were down about 6 percent after hours on Friday.
Although, Twitter said it is still committed to closing the deal at the agreed-upon price and plans to pursue legal action to enforce the agreement.
TechEconomy reported in May that Musk might be considering pulling away from taking over the micro-blogging platform. This move will cost him a whopping $1b termination fee.
In a letter to the company, filed Friday with the Securities and Exchange Commission, Musk accuses Twitter of making “false and misleading representations” about the prevalence of fake accounts on its platform.
He says the company has not complied with its obligations to share data and information that he says he needs to evaluate its business.
“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,” Musk’s lawyer, Mike Ringler, wrote.
Legal experts say this may not be sufficient grounds to break off the $44 billion deal without Musk being on the hook for a hefty fine. In response to Musk’s letter, the chair of Twitter’s board said it planned to sue.
“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,” said Bret Taylor in a tweet, referring to a Delaware court that handles corporate disputes.