Musk sends new letter to cancel Twitter deal after whistleblower claims

Aug 30 (Reuters) – Elon Musk has sent an additional letter ending the deal to Twitter Inc (TWTR.N) To include a recent whistleblower complaint from the social media company’s former chief of security as another reason to cancel the $44 billion deal.

Last week, Peiter Zatko, a hacker known as “Mudge,” said in his complaint that Twitter prioritized user growth over reducing spam and erroneously claimed to have a robust security plan. Read more

In a letter dated August 29, Musk and his legal team said that if the claim was true, Twitter had violated some terms of the merger agreement.

However, Twitter said in its regulatory filing that the new termination notice is invalid and unlawful under the terms of the deal.

Musk also called up Zatko, looking for information mostly about the way the microblogging site measures a spam account.

Musk decided to end the deal in July, saying the company had misled him and the regulators about the true number of spam or bot accounts on the microblogging platform.

His legal team said the allegations regarding certain facts, which were known to Twitter prior to July 8 but were not disclosed to them, provide additional and distinct grounds for closing the deal, according to a regulatory filing by Musk on Tuesday.

The latest turn of events comes as the two sides head into a five-day trial in Delaware’s chancellery court scheduled to begin Oct. 17. Twitter is asking Chancellor Kathleen McCormick to order Musk to buy it for $54.20 a share.

Twitter shares fell 2.5% to $39.02 before the bell.

Additional reporting by Ankur Banerjee in Bengaluru; Editing by Aaron Coeur

Our criteria: Thomson Reuters Trust Principles.