Twitter's board has said it plans to enforce Tesla CEO Elon Musk's $44 billion buyout of the social media platform, adding that the move is in the best interest of shareholders, according to a Bloomberg report.
“We intend to close the transaction and enforce the merger agreement,” the board said, according to the publication.
Musk currently appears to be laying the groundwork to renegotiate the $54.20-a-share offer. He has put the deal "on hold" until there is more clarity on the number of fake and spam accounts on Twitter.
Despite his recent comments, Musk is in a legally binding agreement and Twitter's board has indicated that it will hold him to it.
Twitter could technically allow Musk to abandon the deal after paying $1 billion as termination fee – a provision which might come into play if the board doesn't want to go through the hassle of suing Elon Musk.
Musk could also walk away from the deal if Twitter is found to have seriously misreported some figures in its filings which have a material adverse effect (MAE) on the company.
However, courts rarely accept the MAE argument and if the matter does go to court, Twitter could secure an order obligating Musk to complete the acquisition.
This is because the merger agreement includes a specific performance provision that allows Twitter to force Musk to consummate the deal, according to Bloomberg.
Musk has said that his acquisition of Twitter "cannot move forward" until the social media platform shows proof that spam and fake accounts constitute less than five percent of its daily average users.
He said that his team would test "a random sample of 100 followers" of the official Twitter account to figure out if its estimate was accurate. He also invited others to "repeat the same process and see what they discover."
In another tweet, Musk revealed that he picked 100 as the sample size because "that is what Twitter uses to calculate" fake accounts.
While Twitter hasn't confirmed if this is true, Musk said that the company's legal team accused him of violating a non-disclosure agreement (NDA) by revealing the sample size.
(With inputs from Bloomberg.)