It's very much related to the bid. If you materially mis-represent your company then it's a valid reason to scrap the deal.
> As for that bid, the time for due diligence is before, not after, one signs the merger agreement.
That's not how it works.
Try calling Twitter: "I'm doing due diligence on you guys, could you open your books to me"?
They'll laugh at you and hung up.
The agreements is a pre-requisite of doing what "due diligence" means in this context.
"Due diligence" specifically involves looking at things that you're typically not allowed to looked at.
Things like auditing financials of the company, doing an audit of the source code, proprietary technology etc.
It requires the company being acquired to share a lot of proprietary information.
The agreement, which includes $1 billion breakup clause, is necessary to filter out people who are not serious.