July 8 (Reuters) – Elon Musk, CEO of Tesla Inc. (TSLA.O), said Friday that he will terminate his $ 44 billion deal for Twitter Inc. (TWTR.N), saying the social media company had not provided information on counterfeits. accounts on the platform.
Twitter shares fell 7% in expanded trading. Musk had offered $ 54.20 per share in April.
In a presentation, Musk’s lawyers said Twitter had failed or refused to respond to several requests for information about fake or spam accounts on the platform, which is critical to the company’s business performance. .
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“Twitter is materially violating several provisions of this agreement, it appears to have made false and misleading statements on which Mr Musk relied when he signed the merger agreement,” the presentation said.
The announcement is another twist in a saga of not wanting after the world’s richest person reached a $ 44 billion deal on Twitter in April, but then suspended the purchase until the company Social media proved that spam robots represent less. more than 5% of its total users.
The terms of the agreement require Musk to pay a $ 1 billion breakout fee if he does not complete the transaction.
Musk had threatened to stop the deal unless the company showed evidence that spam and bot accounts were less than 5% of users who see advertising on the social media service.
The decision is likely to result in a long and protracted legal battle between the billionaire and the 16-year-old San Francisco-based company.
Twitter did not immediately respond to a request for comment from Reuters.
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Report by Chavi Mehta in Bangalore; Editing by Sriraj Kalluvila and Lisa Shumaker
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