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Twitter’s report of the agreement shows Musk signing without requesting further information.

(Reuters) – Twitter Inc. (NYSE:TWTR) told the story of its talks with Elon Musk about a deal on Tuesday. It showed that Musk didn’t ask the questions about Twitter’s business that he now says are the reason he’s “putting on hold” the $44 billion purchase.

The story is part of Twitter’s proxy statement, which gives shareholders all the information they need to vote on the proposal. It shows Musk rushing to close a deal with his “best and last” offer.

The proxy statement says that Musk talked about buying Twitter over the weekend of April 23 and 24 without doing the research he should have.

Since signing the agreement on April 25, Musk has questioned the veracity of Twitter’s public disclosures about spam accounts being fewer than 5% of its user base, suggesting they must be at least 20%. Even though Twitter said in its papers that the numbers might be bigger than expected, that is what happened.

According to estimates from independent analysts, between 9 and 15% of the millions of Twitter accounts are run by computers.

Musk tweeted on Tuesday that Twitter CEO Parag Agrawal has failed to provide evidence supporting his company’s estimate and that the transaction cannot proceed until he does. In the time leading up to the purchase, Musk made no attempt to get information about the problem, according to Twitter’s proxy statement.

“Mr. Musk did not request to enter into a confidentiality agreement or seek non-public information about Twitter from Twitter,” the company said in its proxy statement.

The proxy statement makes no note of tweets from Musk threatening to abandon the agreement if he cannot determine how many spam accounts are on the site.

Investors in Twitter seemed persuaded that a sale at the agreed-upon price was now impossible. Twitter shares were trading around $37.55 on Tuesday afternoon, a discount of more than 30% from the $54.20 per share purchase price.

Musk stated for the first time on Monday at a conference in Miami that the acquisition might be completed at a lower cost, although he did not say how much less. He has not yet informed Twitter of his desire to renegotiate the contract.

According to legal experts, Musk would undoubtedly lose in court if he attempted to back out of a contract. However, they claim that any case would certainly be drawn out and would put doubt on Twitter’s profitability. Even companies that won in court against the companies that bought them had to settle for money in the end.

For example, Musk is legally entitled to pay a $1 billion breakup fee if he does not close the sale, but Twitter may sue for “particular performance” to compel Musk to close the agreement and receive a settlement from him.

Ann Lipton, a professor at Tulane Law School, said that since Musk did not ask Twitter for information before signing the deal, it will be hard for him to prove that the company’s public statements were false and caused serious long-term financial problems.

“Long ago, Twitter said, “this is our estimate of spam, but we might be incorrect.” So it is unclear if they made a misleading statement, “Lipton stated.”

committing to the transaction

Twitter said on Tuesday that it was still sticking to the deal at the agreed-upon price and that it expected the deal to close in 2022.

The San Francisco-based business said in its proxy statement that on March 26 Musk showed interest in joining the board or taking the company private. This would show that Musk mischaracterized his interest in Twitter as passive when he disclosed it on April 4 in a regulatory filing. He then explained that it was an active stake.

Musk’s representatives did not reply to comment queries.

The proxy statement says that Musk also said on Twitter that he was thinking about starting a competitor.

The proxy indicates that Twitter’s CEO, Agrawal, is entitled to a $60.2 million golden parachute if the merger closes, while the company’s CFO, Ned Segal, would get $46.4 million. Vijaya Gadde, the senior attorney at Twitter, would be paid $30 million.

The proxy statement indicates that Goldman Sachs Group Inc (NYSE:GS) stands to be paid $65 million for advising Twitter, having previously been paid $15 million.

JPMorgan Chase & Co (NYSE:JPM) stands to get $48 million once the transaction closes, having previously received $5 million for its fairness assessment for Twitter.

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