Musk in threat to quit £35bn Twitter deal after row over fake users


Musk in threat to quit £35bn Twitter deal after row over fake users: But firm says it intends to force through takeover at ‘agreed price’

Elon Musk has threatened to abandon his £35billion Twitter takeover after a row over fake users on the site escalated.

In a sharply worded letter sent to the US regulator, lawyers for the billionaire tycoon said Twitter was holding back information over bots – or fake accounts.

And they added that Musk has the right to walk away from the proposed deal altogether.

Driving the price down? Elon Musk wants proof of fake Twitter accounts before he completes the £35bn deal

Twitter shares fell more than 5 per cent in early trading. They later closed down 1.7 per cent at $39.47 – well below the $54.20 offer price.

The social media giant insists fake accounts make up less than 5 per cent of users, but Musk wants proof, and estimates the figure could be as high as 20 per cent.

The spat which began last month has caused friction between the two sides, with the world’s richest man declaring on May 13 that the deal was on hold.

But yesterday his lawyers upped the ante. In the letter sent to the US Securities and Exchange Commission, they said Twitter had ‘refused to provide the information that Musk has repeatedly requested since May 9 to facilitate his evaluation of fake accounts’. 

They added: ‘Musk believes the company is actively resisting and thwarting his information rights.

‘This is a clear material breach of Twitter’s obligations and Musk reserves his right to terminate the merger agreement.’

Analysts said the deal could soon be abandoned. Susannah Streeter, at Hargreaves Lansdown, said: ‘By openly accusing Twitter of breaching the merger agreement by not providing data on bots and fake accounts, it’s the strongest signal yet that the Tesla founder is prepared to walk away from the £35billion deal. 

‘The takeover was always destined to be a bumpy ride, and this is a deep pothole to navigate for both sides.’

But others believe that Musk is using the issue of fake accounts to try to renegotiate the price down.

Weeks of market turbulence have reduced the value of many companies, making Musk’s offer of $54.20 (£43.23) per share for look even more generous.

Dan Ives, analyst at Wedbush said: ‘It’s highly likely he’s after a cheaper price even if Twitter does provide the data requested.

‘He’s trying to drive the price down to $42 to $45 per share.’

He also backed Musk’s tough stance on fake accounts, saying that the billionaire is entitled to know what he is buying into.

Fake accounts, known as bot accounts, are automated and not run by human users.

They use the reply function or direct messages to send adverts or scams to users and also try to influence public discourse by tweeting political propaganda. Danni Hewson, an analyst at AJ Bell, said: ‘There have been more twists and turns in this takeover bid than your average soap opera and each storyline seems a little more far-fetched than the last.

‘There’s plenty for lawyers to scrap over and at the moment no one would be wise to bet on the ultimate outcome – but it’s clear Elon Musk has fallen a little out of love with the idea of owning the platform he described as important to the future of civilisation just a few short months ago.’

Under the terms of the deal, Musk is contractually obligated to pay a $1billion (£800million) break- up fee – if he does not complete the takeover.

That is just a sliver of his estimated £175billion fortune.

Twitter insisted the deal would go ahead.

‘Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement,’ the company said in a statement.

‘We intend to close the transaction and enforce the merger agreement at the agreed price and terms.’

Read more at DailyMail.co.uk