Mr. Musk withdrew after alleging that Twitter had not provided sufficient details on the quantity of spam and phony accounts that were present on the platform.
Twitter has retained a premier US law firm and wants to file a lawsuit to force the purchase through.
In a tweet, Mr. Musk stated that Twitter would have to “disclose bot information” in court.
After that, the multi-billionaire tweeted a photo of American actor and martial artist Chuck Norris seated at a chessboard along with the words “Chuckmate.”
Early Monday trading saw Twitter’s share price hover at $34.40, significantly behind the $54.20 per share acquisition price agreed upon by Mr. Musk and Twitter’s board in April.
Investors may now respond to Mr. Musk’s declaration on Friday that he wants to back out of the agreement for the first time.
Tesla CEO Elon Musk revealed ambitions to purchase Twitter in April, but the transaction was shelved a month later over concerns about the prevalence of bogus accounts on the network.
The original merger agreement calls for a $1 billion (£830 million) break-up fee, but Twitter wants Elon Musk to compete the transaction rather than insisting that he pay the cash. Twitter’s chairman Bret Taylor tweeted, “The Twitter board is dedicated to concluding the deal on the price and conditions agreed upon with Mr. Musk.”
One of the top corporate legal firms in the world, Wachtell Lipton Rosen & Katz in New York, has been recruited by Twitter.
Professor John Coffee, a former consultant to the Nasdaq and the New York Stock Exchange, told the BBC that Mr. Musk didn’t have a “strong legal argument.”
“It’ll be a big battle, but I would predict it’ll be quietly settled,” he said. “I think Mr Musk doesn’t expect to come out with a victory. I expect that he’s hoping that he can knock another 10 or 20 billion off the price he agreed to pay.”
Mr. Musk stated when the contract was originally reached that he sought to improve the website by “beating the spam bots, and authenticating all people.” Twitter has long struggled with artificial “bots” that continuously publish inaccurate or harmful information.
The businessman had requested proof to support the company’s claim that less than 5% of its users are spam and bot accounts. According to Mr. Musk, up to 20% or more of users may be made up of spam or automated accounts.
Shares in Mr. Musk’s electric vehicle company Tesla plummeted by almost 20% when he initially agreed to acquire Twitter in April. There was subsequently talk that Mr. Musk might use the approximately $8.5 billion (£6.8 billion) raised to help finance the transaction.
When the markets changed, Mr. Musk “sort of had cold feet,” according to Ann Lipton, an attorney who has handled class actions involving some of the biggest corporations in the world. She added that it “appeared like his wealth was harmed when Tesla’s stock price declined as well.”
“Now he’s looking for an out but merger agreements are very hard to get out of,” she added. “Even if there was a false representation as Musk claims, he claims that Twitter falsely represented the amount of spam on the platform. You can’t get out of the deal just for that.”
