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Elon Musk Twitter takeover deal in ‘serious jeopardy’ | Twitter

The proposed takeover of Twitter by Elon Musk is in “serious danger,” according to a report, sending the company’s shares down 4% in after-hours trading on Wall Street.

Musk’s team has dropped certain discussions about funding the $44 billion deal, according to a Washington Post report, citing three people familiar with the matter. According to the report, Musk concluded that Twitter’s numbers on spam accounts – a bone of contention in the deal – were not detectable.

Twitter executives on Thursday defended their spam policy, citing a team of specialists and automated processes Weed out 1 million fake accounts a day, but the report found that accessing the company’s public tweets feed still hadn’t satisfied Musk. Twitter has consistently stated that less than 5% of its daily active users are spam accounts — a figure Musk openly disputes.

The report states that a “change of direction” from Musk is likely to happen soon, suggesting he will carry out his threats to try to walk away from the agreed deal.

However, legal experts said the world’s richest man, who is also Tesla’s CEO, would struggle to end the acquisition without litigation. The purchase agreement Twitter includes clauses that include seeking “specific performance,” meaning a court in Delaware — the US state that has jurisdiction over the deal — will order Musk to go through with the deal at the agreed price of $54.20 per share . Shares were priced at $37.10 in after-hours trading.

“Eventually, the Twitter board of directors will get tired of the shenanigans and will file a lawsuit over certain achievements in Delaware,” said Brian Quinn, an associate professor at Boston College Law School.

Twitter can also seek a $1 billion disruption fee from Musk if he tries to break the agreement. However, signs of a legal exit strategy began to emerge from Musk’s attorneys over the past month sent a letter warned Twitter that refusing to cooperate on the spam account issue was a “material breach” of the agreement. Musk’s legal team argues that failure to provide information about false accounts violates a covenant in the agreement, a promise to act in a certain way during the sales process that would allow him to walk out of the deal.

Twitter subsequently provided data for his 500 million daily tweets to reassure Musk, but the Washington Post report shows he was not happy with the results of his team’s subsequent analysis.

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Carl Tobias, the Williams Law Professor at the University of Richmond, said the deal, which was reported as “at risk,” is the latest iteration of buyer regret for Musk.

“The fuss over bots appeared to be an excuse to avoid forfeiting the $1 billion termination fee. As a result, Musk seemed to say for weeks that he didn’t agree with the deal, and he now appears to be trying to back out of the deal.”

A Twitter spokesman said: “Twitter has and will continue to cooperatively share information with Mr. Musk to complete the transaction pursuant to the terms of the merger agreement. We believe this agreement is in the best interests of all shareholders. We intend to complete the transaction and enforce the merger agreement at the agreed price and terms.”

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