Elon Musk pulls out of $44bn Twitter acquisition deal over breach of agreement

World’s richest person, American, Elon Musk has announced exiting plans to acquire the micro-blogging platform, Twitter, over alleged multiple breaches of the agreement.

The deal to buy Twitter said to be worth $44bn was earlier entered into, this year by Musk with Twitter Management, amid opposition by some of the organisation’s retired owners.

The announcement is the latest twist in a long-running saga after the world’s richest person decided to buy Twitter in April.

Musk said he had backed out because Twitter failed to provide enough information on the number of spam and fake accounts.

Twitter says it plans to pursue legal action to enforce the agreement.

“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk,” Twitter chairman Bret Taylor wrote in a tweet, setting up a potentially long and protracted legal battle between the two sides.

The original merger agreement includes a $1bn break-up fee.

It would be recalled that in May, this year, Musk said the deal was “temporarily on hold” as he was awaiting data on the number of fake and spam accounts on Twitter.

The billionaire businessman had asked for evidence to back the company’s assertion that spam and bot accounts make up less than 5% of its total users.

In a letter filed with the US Securities and Exchange Commission, Musk’s lawyer said Twitter had failed or refused to provide this information.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter reads.

Spam accounts are designed to spread information to large numbers of people and manipulate the way they interact with the platform. On Thursday, Twitter said it removed around 1 million such accounts each day.

Musk believes that spam or bot accounts could account for 20% or more of Twitter users.

Elon Musk has for weeks been trying to get information about how many daily active users Twitter has.

In a filing, Musk complained that he had repeatedly been refused information about the number of bot accounts on Twitter – which is why he wished to terminate the deal.

Elon Musk though has already put pen to paper on this deal, and it is not totally clear whether he can back out at this stage, as he will need to prove that Twitter breached their agreement.

There are other potential reasons why Musk might want to pull out of the deal.

And then there was the impact the potential merger was having on Musk’s other companies. Tesla’s share price has fallen significantly since he announced his interest in Twitter.

Musk, said to be the world’s richest person, is the founder of rocket company SpaceX and CEO of electric car company Tesla.

A self-described “free speech absolutist”, he had pledged to loosen Twitter’s content moderation rules once the company was under his ownership.

He has long criticised Twitter’s ban of some accounts, like that of former US President Donald Trump.

He has also called for more transparency over how the platform presents tweets to users, a system that currently allows some to be promoted and given wider audiences.