Arab Press

بالشعب و للشعب
Wednesday, Mar 18, 2026

What are Elon Musk’s options in the Twitter takeover deal?

What are Elon Musk’s options in the Twitter takeover deal?

The Tesla chief says the deal cannot go ahead unless the platform proves that fewer than 5% of users are bots

Elon Musk has said his $44bn (£35bn) planned takeover of Twitter cannot progress until the microblogging platform proves that fewer than 5% of its users are fake or spam accounts. There is a strong chance the world’s richest person could try to walk away from the deal or to negotiate a lower price than the agreed $54.20 a share.

This raises questions about what actions Musk can take under the terms of the deal he signed last month with Twitter, which experts say gives the Tesla chief executive limited room for manoeuvre.


Is the deal legally binding?


Yes it is, and it is very detailed. For all the talk from Musk of putting the deal on hold or negotiating a lower price, he has committed himself to the takeover at $54.20 a share by signing a formal agreement. It is going to be difficult to wriggle out of it. As section 6.3 (a) states: “The parties hereto will use their respective reasonable best efforts to consummate and make effective the transactions contemplated by this agreement.”

It is a standard clause, according to Brian Quinn, an associate professor at Boston College law school, but has bite. “In all contracts, there is an implied obligation of good faith and fair dealing. Musk agrees to use his ‘reasonable best efforts’ to get the deal done. He can’t torpedo the deal by simply refusing to continue,” Quinn said.


Does the bot issue change the deal’s terms?


Musk indicated on Monday that his concerns about fake or spam accounts on Twitter – that the actual numbers are higher than Twitter estimates – could constitute a “material adverse misstatement”, if it emerges that the platform’s fake or bot accounts amount to far more than 5% of its 229 million user base. Musk could argue that, if it transpires Twitter has much higher-than-expected fake or spam account numbers, it constitutes a “material adverse effect” and he should be allowed to walk away from the agreement.

However, the adverse effect clause is difficult to get past a court. In one exceptional case in the state of Delaware – the jurisdiction of the Twitter deal – a judge allowed a company to scrap a deal because a whistleblower revealed fraud at the selling business. But Musk is on much trickier ground. Twitter has flagged the 5% figure in its quarterly results for the past eight years, with the caveat that the true number could be higher.

Musk knew what he was signing up for, Quinn said. “Bots are a well-known problem on Twitter. Musk even pointed to getting rid of bots as one way his ownership would add value to the business. Now, he is apparently shocked that there are bots on the platform? It’s a weak pretext with no legal legs.

“Also, Twitter’s disclosure to the US Securities and Exchange Commission with regard to bots is sufficiently hedged that a buyer should reasonably know that it might be higher than 5%.”

Morgan Ricks, professor of law at Vanderbilt Law School, adds: “Nothing that has happened so far comes anywhere close to a material adverse effect. Musk’s comments about fake accounts are an irrelevant sideshow.”


Can Musk unilaterally seek a lower price?


No, but there is a scenario where one could be negotiated. If Musk were to walk away Twitter would probably hold his feet to the fire, suing him in Delaware under the terms of the deal. As the litigation rolls on both parties could seek to negotiate a new price. However, in a strictly legal sense, Musk’s hand is not strong.


Can Musk just walk?


Again, no. The deal agreement not only includes a $1bn break fee if Musk does quit, but Twitter can also enact a clause that could force Musk to complete the deal at $54.20 a share. Section 9.9 of the agreement entitles Twitter to “specific performance”, whereby Musk has to pay up if he still has the debt-financing in place and Twitter still wants to close the deal. Twitter is in control here, Quinn said. “The remedy – a termination fee or specific performance is at the election of the company, not Musk,” he said.

Vanderbilt’s Ricks adds: “If Musk isn’t willing to close at $54.20 and if the parties can’t reach a revised deal or settlement, Twitter will very likely sue for specific performance.”Twitter, for its part, remains committed despite Musk’s behaviour. In a statement on Tuesday it said: “Twitter is committed to completing the transaction on the agreed price and terms as promptly as practicable.”


Will Musk be able to take over a major company again?


Whatever happens with Twitter, Musk’s actions in recent weeks will have alarmed boardrooms around the US and the world. Ricks says Musk might find some tougher conditions attached to the next attempted takeover. “Any board selling their company to Musk should insist on an extremely high break fee and make him put it into an escrow account upfront.”

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
U.S. Lawmakers Press Rubio to Enforce Strong Safeguards in Saudi Nuclear Deal
Iran Issues Evacuation Warning to Gulf States After Strike on Major Gas Field
Saudi Arabia to Convene Arab and Islamic Ministers for Urgent Talks on Regional Conflict
Saudi Arabia Confirms Eid al-Fitr as Moon Sighting Determines End of Ramadan
Saudi Arabia Boosts Crude Exports to Highest Levels Since 2023, Data Shows
Iran Issues Warning to Gulf Energy Infrastructure Following Strike on Major Gas Field
Saudi Arabia Restarts Ras Tanura Refinery Following Drone Strike, Reinforcing Energy Resilience
Saudi Arabia Restarts Ras Tanura Refinery Following Drone Strike, Reinforcing Energy Resilience
Saudi Arabia Intercepts Ballistic Missiles Targeting Riyadh Amid Escalating Regional Tensions
Saudi Arabia Restores Significant Oil Flows Using Hormuz Bypass Amid Regional Tensions
Saudi Arabia Signals Potential Activation of Defence Pact with Pakistan Amid Escalating Iran Conflict
Saudi Supreme Court Urges Muslims to Observe Crescent Moon for Eid Determination
Saudi Supreme Court Urges Muslims to Observe Crescent Moon for Eid Determination
Saudi Arabia Reassesses Iran Strategy as Regional Conflict Tests MBS’s Diplomatic Bet
Iran Steps Up Drone Strikes on Saudi Oil Sites, Heightening Risks to Global Supply
Regional Fallout Grows as Iran Conflict Sends Shockwaves Across Jordan, Saudi Arabia, and Egypt
Saudi Arabia Intercepts Seven Drones in Intensifying Regional Security Threat
Saudi Arabia Intercepts Seven Drones in Intensifying Regional Security Threat
Saudi Arabia Weighs Regional Risks as Iran Conflict Deepens and Security Calculations Shift
Gulf States Confront Limits of U.S. Protection as Regional War Intensifies
Gulf Producers Rush to Reroute Oil Exports as Iran Tightens Control of Hormuz Strait
Saudi Gaming Investment Arm Acquires Strategic Stake in Capcom to Expand Global Influence
Iran Intensifies Strikes on Saudi Oil Infrastructure as Regional War Escalates
Saudi Arabia Targets South African Professionals in New Recruitment Drive Amid Regional Uncertainty
Formula One Faces Major Financial Hit as Bahrain and Saudi Arabian Grands Prix Cancelled Amid Middle East Conflict
U.S. and Saudi Firms Launch Local Production of Attritable Drone Systems in Saudi Arabia
Saudi Arabia and UAE Warn Rising Gulf Tensions Could Endanger Regional Security
Saudi Arabia Rejects Claims It Encouraged Prolonged War With Iran
Saudi Arabia to Host World’s Largest Single-Cell Protein Plant as Food Security Push Accelerates
Saudi Crown Prince Urges Trump to Continue Military Pressure on Iran
Iran Intensifies Drone Campaign Against Saudi Arabia as Gulf Conflict Escalates
When Is Eid al-Fitr 2026? Saudi Arabia Awaits Moon Sighting to Confirm End of Ramadan
When Is Eid al-Fitr 2026? Saudi Arabia Awaits Moon Sighting to Confirm End of Ramadan
Iranian Missile Strike Damages Five U.S. Refueling Aircraft at Saudi Air Base
Iranian Missile Strike Damages Five U.S. Refueling Aircraft at Saudi Air Base
Washington State Pilot Among Six U.S. Airmen Killed in Military Aircraft Crash Over Iraq
Severe Storm Threat Looms Over Washington as Tornado Risk and Damaging Winds Target Mid-Atlantic
Trump Supports FCC Warning to Broadcasters Over Iran War Reporting
Trump Supports FCC Warning to Broadcasters Over Iran War Reporting
Saudi Stocks Edge Lower as Tadawul All Share Index Slips Slightly at Market Close
Iranian Missile and Drone Strike Targets Saudi Arabia’s Prince Sultan Air Base Hosting US Aircraft
Saudi Air Defenses Intercept Drone Over Eastern Province as Iranian Strike Campaign Intensifies
Middle East War Reshapes Gulf Economies as Saudi Arabia and Oman Gain Strategic Leverage While UAE Faces Economic Shock
Iranian Ambassador in Riyadh Blames ‘Enemies’ for Attacks Across the Gulf
Israeli Envoy Ron Dermer Reportedly Visits Saudi Arabia for Discussions on Potential Lebanon Talks
Formula One Cancels Bahrain and Saudi Arabian Grands Prix Scheduled for April
Iran’s Ambassador in Riyadh Rejects Claims Tehran Targeted Saudi Oil Facilities
Saudi Arabia Declares 2026 ‘Year of Artificial Intelligence’ in Major Push for Data-Driven Economy
Saudi Arabia’s 2018 Budget Signals Strong Push for Non-Oil Economic Growth
Pakistan Envoy in Riyadh Says Regional Diplomacy Intensifying to Prevent Wider Middle East War
×