Getty Images | Angela Weiss
Elon Musk has informed Twitter that he is once again willing to buy the company at the originally agreed price, according to a Bloomberg News report.
Elon Musk proposes to buy Twitter Inc. at the original offer price of $54.20 per share… Musk made the proposal in a letter to Twitter, according to people familiar with the matter, asking to be unidentified. when discussing confidential information.” Bloomberg wrote.
The Wall Street Journal then reported that Musk’s “lawyers forwarded the proposal to Twitter’s attorneys on Monday and filed a confidential letter with the Delaware Chancery Court ahead of an emergency hearing on the case scheduled for Tuesday.”
The reports come less than two weeks before a trial is scheduled to determine whether Musk would be forced to go through with the deal. Musk agreed to buy Twitter on April 25 and then tried to get out of the deal on July 8. Twitter sued Musk in the Delaware Court of Chancery judge to force him to complete the $44 billion purchase, and a five-day trial is scheduled to begin Oct. 17. Musk would also answer questions in a statement later this week.
“If Twitter accepts the proposal, the two sides will not have to go through with a five-day jury-less trial that starts on October 17. There are no guarantees that they will reach a deal and the process can still go ahead as planned.” wrote the WSJ.
Twitter stock trading was temporarily halted following the Bloomberg report. After trading resumed, the stock price rose nearly 13 percent, reaching $47.93.
Musk demands delay in lawsuit
Update, 5:12 PM ET: Musk’s letter to Twitter is now public and is on file with the Securities and Exchange Commission. It states that Musk wants to complete the merger “provided that the Delaware Chancery Court immediately postpones the action… The offer to close the deal is also pending receipt of Musk’s debt financing.
While Musk’s request would prevent the trial from starting as planned, a delay wouldn’t stop Twitter from resuming the lawsuit against Musk if he backs out of the deal.
Twitter reportedly suspicious of new offer amid “distrust”
Musk lost a few key pre-trial rulings in Delaware court. Judge Kathaleen McCormick, for example, rejected his request to postpone the trial until at least February 2023. “The reality is that delay will do irreparable harm to the sellers,” she said.
Musk’s bid to exit the merger revolves around his unproven claim that Twitter’s spam estimates are incorrect. Twitter says less than 5 percent of its daily active users (mDAU) are spam or fake, pointing out that Musk’s attempt to prove the estimate was wrong was based on a tool that labeled his own account a likely bot. Twitter also argues that Musk has no right to end the deal on the basis of spam data, saying he “failed all due diligence” in giving Twitter a take-it-or-leave-it offer.
Twitter reportedly won’t take immediate action on Musk’s new proposal and would like the court to oversee the process if the merger goes through. “Twitter is considering accepting the proposal and will not take action for at least another day, according to one of the people.” [familiar with the negotiations]The Washington Post reports. “As there is great mistrust on both sides, Twitter leaders are questioning whether the letter is a legal maneuver,” this person said.
“The court held an emergency hearing with both parties on Tuesday morning,” the Post also wrote. “Musk was willing to drop the case, but Twitter wanted assurances that the court would oversee the trial because of the mistrust, one of the people said. A hearing is scheduled for later Tuesday.”
