Twitter sues Elon Musk in bid to force him to complete $44bn takeover

Tesla founder pulled out of deal amid claims he couldn't verify how many bot accounts are on Twitter

Mr Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California, in 2014. Reuters

Tesla and SpaceX founder Elon Musk. Getty Images

Mr Musk with music producer Quincy Jones. AFP

The wealthiest person in the world with a worth of $274.3 billion, Mr Musk was named 'Person of the Year' by 'Time' magazine in 2021. Getty Images

Focus on Mr Musk's taxes grew last year as Tesla achieved a rarefied $1 trillion in market value. Reuters

The billionaire has hit back, saying he does not draw a salary from either SpaceX or Tesla, and pays an effective tax rate of 53 per cent on stock options he exercises. AFP

Then US president Barack Obama speaks to Mr Musk on a tour of Cape Canaveral Air Force Station in Cape Canaveral, Florida, in 2010. Reuters

Mr Musk during a television interview after Tesla's initial public offering at the Nasdaq market in New York, in 2010. Reuters

With former wife Talulah Riley at the 2011 Orange British Academy Film Awards in London. Getty Images

With Japan's former prime minister Shinzo Abe after a test drive of the Tesla Model S P85D in Palo Alto, California, in 2015. Reuters

Mr Musk during the 67th International Astronautics Congress in Guadalajara, Mexico, in 2016. EPA

From left: SpaceX chief executive Elon Musk, Corning chief executive Wendell Weeks, then US president Donald Trump and Johnson & Johnson chief executive Alex Gorsky during a meeting at the White House. AFP

Mr Musk and former wife Grimes at The Metropolitan Museum of Art in New York City, in 2018. AFP

Mr Musk leaves a court in New York City, in 2019, after a hearing in a lawsuit brought against him by the US Securities and Exchange Commission. Getty Images

A prototype of SpaceX's Starship spacecraft is seen before Mr Musk gives an update on the company's Mars rocket Starship in Boca Chica, Texas, in 2019. Reuters

Mr Musk at the construction site of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, last year. EPA

Dancing onstage during a delivery event for Tesla's China-made Model 3 cars in Shanghai. Reuters

Mikey Day as a lawyer, Cecily Strong as a judge, and host Elon Musk as Wario during the "Wario" sketch on NBC's 'Saturday Night Live', in May. Getty Images

Mr Musk with Armin Laschet, CDU party federal chairman and prime minister of Germany's North Rhine-Westphalia, talk during a tour of the plant of the future foundry of the Tesla Gigafactory in Grünheide, near Berlin, Germany. Getty Images

Twitter sued billionaire Elon Musk on Tuesday over his abandoned $44 billion takeover offer.

Lawyers for Twitter told a Delaware judge that the world’s richest man failed to honour his agreement to pay $54.20 a share for the social-media platform.

Mr Musk abandoned the deal on Friday, saying it was partly because of the number of fake accounts among users.

Twitter chairman Bret Taylor said last week that the company planned to pursue legal action against Mr Musk, and in a letter released on Monday, its lawyers called the deal termination “invalid and wrongful".

The filing sets up what will be a closely watched court battle between the Tesla co-founder and Twitter, a communications tool the billionaire favours, but through which his posts have previously put him in legal trouble.

Mr Musk backed out of the deal to buy the platform on July 8, saying in a regulatory filing that the company has made “misleading representations” over the number of so-called spam bots on the service.

Twitter has not “complied with its contractual obligations” to provide information about how to assess how prevalent the bots are on the social medial service, Mr Musk said in a letter to Twitter that was included in the filing.

He said Twitter had failed to operate its normal course of business. The company instituted a hiring freeze, fired senior leaders and had other major departures.

“The company has not received parent’s consent for changes in the conduct of its business, including for the specific changes listed above,” Mr Musk said in the letter, calling it a “material breach” of the merger deal.

His deal with Twitter had included a provision that if it fell apart, the party breaking the agreement would pay a termination fee of $1bn under certain circumstances.

Legal experts have debated whether the conflict over spam bots is enough to allow Mr Musk to walk away from the deal.

But the merger agreement also includes a specific performance provision that allows Twitter to force Mr Musk to go ahead with the deal.

Twitter must prove it did not breach the buyout agreement terms and that he broke the deal by pulling out.

The company hired merger law heavyweight Wachtell, Lipton, Rosen and Katz to represent it in the fight.