Elon Musk is abandoning his $44 billion bid for Twitter, alleging that the social media company had failed to provide enough information about the number of fake accounts on its service.
Twitter has vowed to challenge Musk in court to uphold the agreement.
In a filing reported by Reuters, Musk’s lawyers said Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business performance.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” the filing said.
Musk also said he was walking away because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter’s obligation to “preserve substantially intact the material components of its current business organization.”
Twitter’s chairman, Bret Taylor, said that the board planned to pursue legal action to enforce the deal.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk…,” he wrote.
Twitter said last month that it was making raw data available to Musk regarding hundreds of millions of daily tweets when he raised the issue again after announcing that he would buy the social media platform.
Twitter has said for years in regulatory filings that it believes about 5% of the accounts on the platform are fake.
Musk agreed to a $1 billion breakup fee as part of the buyout agreement, although it appears Twitter CEO Parag Agrawal and the company are settling in for a legal fight to force the sale.
Twitter shares have sold off since Musk has cooled on acquiring the platform. The share price is now below $33, far from the $54.20 that Musk agreed to pay for the company.