Shares of Twitter fell about 6 per cent in premarket trading on Monday as a legal tussle between Elon Musk and the social media company is expected to take center stage after the world's richest person walked away from the US$44 billion deal.
Musk, the chief executive officer of Tesla, said on Friday he was terminating his deal to buy Twitter because the company had breached multiple provisions of the merger agreement. Twitter is planning to sue Musk as early as this week and force him to complete the acquisition, people familiar with the matter told Reuters.
On Monday, Musk took a jab at Twitter's stance, tweeting that the legal battle would lead to the company disclosing information on bots and spam accounts in court.Twitter shares ended at US$36.81 on Friday and were at a 32 per cent discount to Musk's US$54.20 bid, as they have been hit by a double whammy of a slump in the broader equity market and investor skepticism over the deal.
"We believe that Elon Musk's intentions to terminate the merger are more based on the recent market sell-off than... Twitter's 'failure' to comply with his requests," Jefferies analyst Brent Thill said in a note.The contract calls for Musk to pay Twitter a US$1 billion break-up fee if he cannot complete the deal for reasons such as the acquisition financing falling through or regulators blocking the deal.
Source: News Formal (newsformal.com)
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