Twitter is planning to sue Musk as early as this week and force him to complete the acquisition, people familiar with the matter told Reuters.
Legal experts say the 16-year-old social media company has a strong legal case against Musk, but could opt for a renegotiation or settlement instead of a long court fight.
“We believe that Elon Musk’s intentions to terminate the merger are more based on the recent market sell-off than… Twitter’s ‘failure’ to comply with his requests,” Jefferies analyst Brent Thill wrote in a note.
The contract calls for Musk to pay Twitter a $1 billion break-up fee if he cannot complete the deal for reasons such as the acquisition financing falling through or regulators blocking the deal. The fee would not be applicable, however, if Musk terminates the deal on his own.