Twitter calls Elon Musk’s third attempt to scrap acquisition invalid ahead of key shareholder vote

Twitter said Monday that payments to a whistleblower did not violate any of its obligations under the $44 billion acquisition proposed by Elon Musk, after the billionaire sent a third letter to try to cancel the deal.

The social media giant said it intended to enforce the agreement and close the deal at the price and terms agreed to with Musk, according to a Securities and Exchange Commission filing.

Twitter shareholders will vote Tuesday on whether to approve or reject Musk’s takeover bid.

Twitter’s board of directors previously urged its shareholders to approve the sale of the company to Musk.

On Friday, Musk’s legal team sent a letter to Twitter citing another reason to cancel the proposed acquisition. Musk’s team has argued that the multimillion-dollar payment Twitter paid to whistleblower Peter “Mudge” Zatko violates the terms of the deal.

Zatko last month accused the social media company of “outstanding, egregious failings” related to privacy, security and content moderation.

Musk’s latest letter is his third attempt to terminate the deal with Twitter.

The Tesla CEO’s legal team first filed a notice on July 8 with the SEC to terminate the Twitter acquisition, claiming that “Twitter has failed to comply with its contractual obligations.”

A subsequent letter dated August 29 cited allegations made by Zatko as the reason the deal did not go through.

In Friday’s letter, Musk’s legal team said Twitter’s alleged $7.75 million in compensation to Zatko was another breach of the acquisition agreement.

Twitter said it had not breached any of its obligations.

“As was the case with your purported termination notices dated July 8, 2022 and dated August 29, 2022, the purported termination set forth in your letter dated September 9, 2022 is invalid and unlawful under the Agreement,” wrote the legal team of the social media giant of Musk’s representatives.

“Twitter has not breached any of its representations or obligations under the Agreement and, subject to the approval of Twitter stockholders at the special meeting on September 13, 2022, all conditions precedent to the closing of the Merger will have been satisfied.”

The Twitter-Musk saga has gotten very complicated. Musk originally offered to buy the company in April. After some resistance, Twitter agreed to the deal.

Shortly after, however, Musk began to complain that the number of fake or spam accounts on the social media platform was higher than disclosed.

Twitter and Musk will go to trial on October 17 in Delaware to resolve Musk’s attempt to reverse the acquisition of the company unless they first reach a settlement.

Musk will be allowed to include the allegations made by Zatko in his counterclaim.

The matter is complicated by a vote by Twitter shareholders on Tuesday that could give the green light to the acquisition, but a lawsuit still hangs over the deal.