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Elon Musk withdraws $44bn bid to buy Twitter after weeks of high drama

Elon Musk has withdrawn his $44bn bid to buy Twitter after a dramatic few weeks in the company’s corporate history.

“Mr Musk is terminating the merger agreement because 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, and is likely to suffer a Company Material Adverse Effect,” wrote lawyers for Musk to Twitter.

The Tesla CEO and richest man on earth had reached a deal to buy Twitter on 25 April, with Musk offering to purchase all of the company’s shares for $54.20 each.

The deal came after weeks of speculation over the company’s future following a 4 April revelation that Musk had become the social media platform’s largest single shareholder.

Musk declared a takeover bid on 14 April, and Twitter’s board agreed after Musk confirmed a funding package for the deal that included $21bn of his own money.

With the deal, Musk stood to take control of a social media network with more than 200 million users. An avid, but critical user of the platform, he had vowed to push through various reforms, including relaxing its content restrictions, ridding the platform of fake and automated accounts and shifting away from its advertising-based revenue model.

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Musk announced 13 May that the deal was “on hold” while he awaited details supporting Twitter’s assertion that fewer than 5% of its users were spam or fake accounts. He has asserted the number is 20% and Twitter will need to show proof of the lower number for the purchase to go through.

Twitter chief executive, Parag Agrawal, attempted to address Musk’s concerns in a lengthy tweet thread but his efforts to explain the problem “with the benefit of data, facts, and context” were met with a poo emoji from the world’s richest person.

Musk later suggested he could seek to pay a lower price for Twitter because of the fake accounts issue. Speaking virtually at a conference in Miami, he said reducing his agreed $54.20 a share offer would not be “out of the question”.

However, the terms of Musk’s takeover agreement with Twitter gave him only limited room for manoeuvre, legal experts said.

The Musk takeover had been controversial among Twitter employees, with consternation among staff growing after Musk engaged with tweets criticizing Twitter staff following the announcement of the agreement.

According to the 95-page acquisition agreement filed with the US Securities and Exchange Commission, Musk would have to pay Twitter $1bn if he walked away from the deal.

Similarly, Twitter had agreed to pay a $1bn fee to the entrepreneur if, for instance, it accepted a higher bid from elsewhere. Guardian