Elon Musk, the founder and CEO of Tesla and the richest man in the world, announced on Friday that he was cancelling his $44 billion plan to acquire Twitter because the social media business had broken numerous merger agreement clauses.

In response to this, Bret Taylor, the CEO of Twitter said that the company would take legal action. He tweeted, “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.”

Musk’s attorneys said in a document that Twitter has ignored or refused to reply to several requests for information on phoney or spam accounts on the site, which is essential to the operation of the company.

According to the filling, “Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr Musk relied when entering into the Merger Agreement.”

Musk added that another reason he was leaving Twitter was that the company had broken its promise to “preserve essentially intact the material components of its current business organization” by firing high-ranking executives and one-third of the talent acquisition team.

According to a person familiar with the situation, Twitter, however, is hoping that court procedures will begin in a few weeks and conclude in a few months.

In extended trading, shares of Twitter were down 6% at $34.58. That is 36% less than the $54.20 per share Musk had agreed to pay to acquire Twitter. But after he decided to purchase Twitter on April 25, the price quickly started to decline as investors worried Musk might back out of the deal.

With Musk abandoning the company and Twitter vowing to fight is casting a spell of uncertainty on the future of the company and its stock price.

Source: Times Of India