Twitter sues Elon Musk for backing out of $44 bn buyout

Twitter has sued Tesla CEO Elon Musk after he decided to back out of the USD 44 billion takeover deal.

As per The Verge, the lawsuit was filed in Delaware's court of chancery on Tuesday, accusing Musk of hypocrisy.

"Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions," Twitter wrote in the lawsuit.

Musk was quick enough to react to the lawsuit.

Minutes after news surfaced online that Twitter has sued him, Musk took to the microblogging site and just simply tweeted, "Oh the irony lol."

The lawsuit marks the beginning of what could be a protracted legal battle as Twitter seeks to hold Musk to his deal to pay USD 54.20 per share for the company.

Twitter, which is being represented by M&A powerhouse law firm Wachtell, Lipton, Rosen & Katz, alleged that Musk looked for an escape from the deal, which required a "material adverse effect" or breach of contract.

"Musk had to try to conjure one of those," the lawsuit stated.

Musk announced the termination of a USD 44 billion Twitter purchase deal in a letter sent by Musk's team to Twitter last week. Musk decided to suspend the deal due to multiple breaches of the purchase agreement.

In April, Musk reached an acquisition agreement with Twitter at USD 54.20 per share in a transaction valued at approximately $44 billion. However, Musk put the deal on hold in May to allow his team to review the veracity of Twitter's claim that less than 5 per cent of accounts on the platform are bots or spam.

Back in June, Musk had openly accused the microblogging website of breaching the merger agreement and threatened to walk away and call off the acquisition of the social media company for not providing the data he has requested on spam and fake accounts.

Musk alleged that Twitter is "actively resisting and thwarting his information rights" as outlined by the deal, CNN reported, citing the letter he sent to Twitter's head of legal, policy and trust, Vijaya Gadde.

Musk demanded that Twitter turn over information about its testing methodologies to support its claims that bots and fake accounts constitute less than 5 per cent of the platform's active user base, a figure the company has consistently stated for years in boilerplate public disclosures.

Musk ridiculed Twitter for initiating a legal battle to force him to purchase the company. A few days ago, Musk tweeted four images of him laughing, "They said I couldn't buy Twitter. Then they wouldn't disclose bot information. Now they want to force me to buy Twitter in court. Now they have to disclose bot information in court."