Musk sued by Twitter investor seeking to force US$44b deal
A TWITTER Inc shareholder has hit Elon Musk with a proposed class action suit, effectively joining the tech giant’s bid to block the world’s richest man from backing out of his pledge to pay US$44 billion to acquire the influential social networking platform.
The lawsuit was filed in Delaware Chancery Court — the same forum that’s set to hold a fast-tracked trial in October of Twitter’s claims against Musk — by an investor who holds 5,500 Twitter shares. In addition to Musk, it names as defendants two “corporate acquisition entities” related to the deal.
The suit, docketed Jul 29, targets Musk’s “lame rationales for reneging on his contract”, accusing the billionaire of fabricating excuses to get out of the buyout. Like Twitter’s earlier suit, it seeks a court order compelling Musk to consummate the transaction.
Musk formally answered Twitter’s suit Jul 29 in a court filing that remains under seal.
Tesla Inc, the electric vehicle maker run by Musk, didn’t immediately respond on Monday (Aug 1) to a request for comment on his behalf. Tesla isn’t named as a defendant.
Musk declared his takeover bid for Twitter on Apr 14, a proposal Twitter’s board agreed to after Musk confirmed a funding package for the deal that included US$21 billion of his own money.
Under the deal, Musk stood to take control of a social media network with more than 200 million users. The billionaire, an avid user of the platform, had vowed to push through changes, including relaxing its content restrictions and purging it of fake and automated accounts.
But he announced about a month later that the deal was “on hold”, pending details supporting Twitter’s assertion that fewer than 5 per cent of its users were spam or fake accounts. He believed the figure to be 20 per cent and called on Twitter to show proof of the lower number for the purchase to go through. BLOOMBERG
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