Elon Musk’s threat to withdraw from his $ 44 billion Twitter acquisition has halted his efforts to organize funding to help him complete the deal.
Musk on Monday accused Twitter of breaching his contract with him by failing to provide information about spam accounts and once again threatened to withdraw from his $ 44 billion acquisition deal.
Musk has threatened to rule out the deal unless the social media company provides him with data to back up his estimate that fake or spam accounts account for less than 5% of his user base.
Lawyers for the world’s richest man wrote that Twitter has refused to provide information that “facilitates its assessment of spam and fake accounts on the company’s platform,” according to a stern letter on Twitter that was presented to the Securities and Exchange Commission.
Musk’s lawyers argued that Twitter’s alleged restriction was “a clear material breach of Twitter’s obligations under the merger agreement.”
Musk is yet to pay $ 33.5 billion in cash to finance the deal after arranging debt financing to cover the rest.
Its liquidity is limited as its wealth, set by Forbes at $ 218 billion, is largely tied to the shares of Tesla, the leading electric car maker.
In April, Musk’s board and Twitter reached an agreement on a $ 44 billion cash acquisition. Twitter
Musk had been involved in talks with a group of private equity firms led by Apollo Global Management, which was reportedly willing to contribute $ 2 billion to $ 3 billion in preferred equity financing, Reuters reported.
These talks are now on hold, according to Reuters.
The pause in the talks is the latest sign that Musk’s threats are delaying the completion of the deal.
Spokesmen for Musk and Twitter did not respond to requests for comment. Apollo declined to comment.
After Twitter’s board of directors reached an agreement with Musk to sell the company in a fully cash deal for $ 45.20 a share, Tesla’s CEO sold $ 8.5 billion in shares of the manufacturer of electric cars.
It has raised $ 7.1 billion from a group of capital co-investors to reduce its contribution.
Musk also tried to further reduce this exposure by arranging a $ 12.5 billion risky margin loan linked to Tesla shares, but later ruled it out last month.
Preferred capital would pay a fixed Twitter dividend, just as a bond or loan pays regular interest, but would be valued based on the company’s equity value.
With post cables