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Billionaire Elon Musk on Friday announced his decision to abandon his $44 billion offer to buy Twitter. The social media giant now plans to take legal action against the Tesla CEO to force the deal to go through.
Musk said he was terminating the biggest buyout in recent times after Twitter failed to provide enough information about the number of fake accounts on the platform.
Twitter and Musk both agreed in April that if a party chose to withdraw from the deal, they would have to pay a fine of $1 billion. With the SpaceX CEO backing out, Twitter could have pushed for the break-up fee but is instead readying for a pitched battle to complete the purchase.
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.
— Bret Taylor (@btaylor) July 8, 2022
The unravelling of the mega deal is just the latest twist in the ongoing saga between the world’s richest man and one of the most influential social media networks, and it may portend a colossal legal showdown ahead.
From a hostile takeover bid, Twitter’s “poison pill” defence to threats of pulling the plug on the acquisition, here’s a recap of what has gone down so far in Elon Musk’s pursuit of Twitter.
January 31, 2022: Elon Musk starts increasing his stake in Twitter. His stake in the micro-blogging site increased to five percent.
March 24: Criticising Twitter, Musk asks users in a tweet, “Free speech is essential to functioning democracy. Do you believe Twitter rigorously adheres to this principle?”
March 26: In another tweet, Musk says he is giving “serious thought” to building an alternative to Twitter, questioning free speech on the platform and whether Twitter is undermining democracy
April 4: Musk buys 9.2 per cent stake in Twitter, thus becoming the largest shareholder of the micro-blogging site. He made a passive investment of 73.5 million shares of common stocks in his personal capacity.
April 5: Twitter offers Musk a seat on the company’s board. CEO Parag Agrawal says in a tweet that “it became clear to us that he would bring great value to our Board.”
April 11: Twitter CEO Parag Agrawal announces Musk will not be joining the board after all.
April 13: A group of Twitter investors files a complaint in the New York Federal Court alleging Musk of delay in revealing his stake in Twitter so that he could buy more shares in the company at a cheaper price.
April 14: The Tesla CEO offers to buy the microblogging site worth $41.39 billion for $54.20 per share, and at a 38 per cent premium to the closing price of Twitter’s stock on April 1, the last trading day before Musk bought the majority stake in the company. In a letter to Twitter Chairman Bret Taylor, Musk says that this is his best and final offer, and if not accepted, he would need to reconsider his position as a shareholder.
April 14: Pennsylvania-based Vanguard holdings acquires a 10.3 per cent stake in the company, thus defeating Musk as the largest shareholder of the company. Twitter’s CEO puts out a statement, reassuring his disgruntled employees that the company is not “held hostage” by Musk’s offer.
April 14: Advocating for free speech, Musk suggests that Twitter should consider doing an open-source algorithm. In another statement, he says that he is not sure about acquiring the microblogging site, but if his bid for Twitter fails, the billionaire has a Plan B.
April 16: Twitter adopts the ‘poison pill’ defence to wield Musk’s attempt at a hostile takeover.
April 25: Musk reaches a deal to buy Twitter for $44 billion and take the company private. The outspoken billionaire has said he wanted to own and privatize Twitter because he thinks it’s not living up to its potential as a platform for free speech.
April 29: Musk sells roughly $8.5 billion worth of shares in Tesla to help fund the purchase of Twitter, according to regulatory filings.
May 5: Musk strengthens his offer to buy Twitter with commitments of more than $7 billion from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
May 10: Musk hints at reversing the Twitter ban of former US President Donald Trump following the Capitol Hill riots of January 6, 2021. He calls the ban a “morally bad decision” and “foolish in the extreme.”
May 13: Musk says his plan to buy Twitter is “temporarily on hold”. He says that he needs to pinpoint the number of spam and fake accounts on the social media platform. Shares of Twitter tumble, while shares of Tesla rebound sharply.
June 6: Musk threatens to end his $44 billion agreement to buy Twitter, accusing the company of refusing to give him information about its spam bot accounts.
July 8: Elon Musk said he intends to terminate his acquisition of Twitter because the social media company breached multiple provisions of the merger agreement. Twitter Chairman Bret Taylor tweeted the company “is committed to closing” the deal and plans to “pursue legal action to enforce the merger agreement.”
— ENDS —
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