Elon Musk’s $44 billion takeover bid for Twitter Inc. is being investigated by Twitter Inc., according to legal experts, who are also trying to unearth proof that Musk sought to thwart the financing of the acquisition, Reuters reports.
According to documents filed over the past two days in the Delaware Court of Chancery, Twitter sent hundreds of civil subpoenas this week to international banks including affiliates of Morgan Stanley, co-investors in the deal like an affiliate of Brookfield Asset Management Inc., and Musk advisors.
Morgan Stanley chose not to respond. An inquiry for comment was not immediately answered by Brookfield. No one could be reached to speak with Musk or Twitter representatives.
The subpoenas ask for emails and records related to the transaction, its funding, and any details on “bot,” or false, Twitter accounts. Additionally, they ask the receivers whether they have any knowledge of how fluctuations in the stock price of Musk’s electric vehicle manufacturer Tesla Inc. may affect the deal.
The subpoenas are a part of Twitter’s lawsuit against Musk, which aims to compel him to honor the agreement at the $54.20 per share price. The Delaware Chancery Court is set to open a five-day trial on October 17.
According to experts, the subpoenas show Twitter is interested in learning what lenders, investors, and advisers were saying about Musk’s actions after he signed the agreement in late April.
On July 8, Musk announced that he was pulling out of the arrangement because Twitter was purportedly in violation of the agreement by withholding information regarding phony accounts on the network. Twitter claims that the false accounts serve as a diversion from the real problem, which is the agreement’s conditions. Additionally, Musk had stated that he was quitting Twitter due to the company’s failure to “preserve largely intact the material components of its present business organization” by firing high-ranking executives and one-third of the talent acquisition team.
Legal experts argue that Musk cannot be forced to complete the transaction if financing fails, providing he is not the reason for the unsuccessful finance.
The subpoenas issued by Twitter centered on Musk’s purported termination of Bob Swan, an operating partner at the venture capital firm Andreessen Horowitz who had initially spearheaded Musk’s efforts to get transaction financing. Twitter’s complaint claims that Antonio Gracias, a longtime colleague of Elon Musk, took his position.
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