Twitter Intends to End Deal with Elon Musk

Billionaire Elon Musk wants to terminate $44 billion deal to buy Twitter, according to a letter sent by a lawyer on his behalf to the company’s chief legal office on Friday.

However, Twitter chairman Bret Taylor said the company was still committed to completing the deal at the agreed price and planned to go to court to enforce the agreement. He wrote:

We are confident we will prevail in the Delaware Court of Chancery.

Although Musk is now officially trying to pull out of the deal, this story is likely far from over.

Under the terms of the agreement, Musk agreed to pay $1 billion if he backed out of the deal. But as Twitter's chairman has pointed out, the company could try to force Musk to honour the terms of the original agreement by suing him for reneging on the deal if they dispute that his arguments should allow him to pull out of the deal.

Musk drew attention to the share price “and is considering whether the company’s declining business prospects and financial outlook constitute a Company Material Adverse Effect giving Mr. Musk a separate and distinct basis for terminating the Merger Agreement.”

The company's shares have fallen significantly since the board announced it had accepted his offer to buy the company at $54.20 a share. The stock ended the trading day at $51.70 a share on the day of the announcement. Twitter's shares were worth $36.81 at market close on Friday.