Billionaire Elon Musk pulled out of his $44 billion deal to buy Twitter accusing the company of “misleading” statements about the number of fake accounts.
Elon Musk also alleged that Twitter breached the agreement when it fired two top managers, without his consent as required by their contract.
Twitter’s chairman, Bret Taylo, said the board will pursue legal action to enforce the merger agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Musk and plans to pursue legal action to enforce the merger agreement,” Mr Taylor tweeted.
The terms of the deal require Tesla and SpaceX boss Elon Musk to pay a $1 billion breakup fee if he does not complete the transaction.
In May, Musk said he was putting the deal on hold until the social media company provided details to back its claim that spam or fake accounts constitute less than five per cent of its active users.
Twitter has maintained that no more than five per cent of accounts are run by software instead of people, while Musk has said he believes the number to be much higher. however, Musk believes that spam or bot accounts could account for 20% or more of Twitter users.
Shares in Twitter fell by 7% in extended trading after the announcement.
Last month, he warned Twitter that he might walk away from his deal to acquire the social media platform if it fails to provide the data on spam and fake accounts that he seeks.
In response, Twitter offered Musk access to its “firehose” of raw data on hundreds of millions of daily tweets. Twitter said such private data helps avoid misidentifying real accounts as spam.
One of the reasons Elon Musk gave for his interest in taking Twitter private was his belief he could add value to the business by getting rid of its spam bots – the same problem that he’s now citing as a reason to end the deal.