Twitter’s high-powered lawyers from Wachtell, Lipton, Rosen & Katz are preparing for a court battle. After Elon Musk finally filed paperwork attempting to exit a $44 billion deal to acquire Twitter last week, they filed a letter today saying Musk’s termination attempt is invalid because “Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the Agreement.”
Twitter is being represented by Wachtell partner William Savitt, who has represented other big companies like Anthem and Sotheby’s in cases against activist shareholders.
Musk says he wants out due to concerns Twitter has misrepresented the amount of bot activity on the platform — the same problem he promised to fix — and that Twitter won’t give him the necessary information to investigate those claims. Twitter insists it has given him all the information he’s asked for.
The question of who is actually in material breach of their deal could decide which party owes the other a lot of money. Some have suggested this entire episode is an attempt by Musk to put the company at a disadvantage, with a falling share price — it dropped by 11 percent today — so he can buy it for considerably less.
There’s also a $1 billion breakup fee detailed in the merger agreement that one side could owe the other, as well as a clause for “specific performance,” that Bloomberg writer Matt Levine points out could enable a court to force Musk to go through with the deal or pay an even larger penalty if the case doesn’t go his way.
For now, however, all we know for sure is that Twitter’s position continues to be “The Agreement is not terminated.”
In response, Elon Musk is, of course, tweeting.