Elon Musk has offered to proceed with a deal to buy Twitter at the price he offered months ago before trying to call it off, according to a legal filing, a stunning development weeks before the two sides were due to face off in a trial.
In a letter that Musk’s side sent to Twitter overnight, he proposed proceeding with the deal at $54.20 a share if the Delaware Chancery Court, which was scheduled to hold the trial on Oct. 17, agrees to “enter an immediate stay” of the case “and adjourn the trial and all other” related proceedings. Twitter enclosed a copy of the letter from Musk’s attorneys in a financial filing Tuesday.
Twitter said in a statement Tuesday that it received the letter and intends to close the transaction at the original share price offered by Musk’s team. The company plans to accept the offer but is waiting for confirmation that the judge can oversee the process, said a person familiar with the discussions who spoke on the condition of anonymity to describe sensitive matters.
Because there is great distrust on both sides, Twitter leaders are still questioning whether the letter represents a legal maneuver, the person said.
Musk’s offer comes at a key moment in the lead-up to the trial, which was due to settle months of legal wrangling between the billionaire and the social media company following Musk’s moves in July to terminate his planned $44 billion purchase of Twitter.
Both sides had been conducting depositions. Musk’s side collected testimony from Twitter chief executive Parag Agrawal and whistleblower Peiter Zatko, the company’s former head of security, who alleged extreme deficiencies in Twitter’s security practices and inaccuracies in its filings to security regulators, according to court schedules.
Musk was scheduled to be deposed in the case Thursday in Austin, Texas, where he lives, after the original date was scrapped, the filings showed. His attorney Alex Spiro’s deposition was expected to follow on Sunday in New York.
Bloomberg News first reported news of the offer Tuesday. Twitter shares were suspended at their highest level in months after the report.
The court held an emergency hearing Tuesday morning with both sides. Musk was willing to drop the case, but Twitter wanted assurances that the court would oversee the process because of the distrust, the person said. How the judge might oversee the process is expected to be the subject of a hearing later Tuesday.
Analysts said Musk’s move reflects his relatively weak position ahead of the trial. Musk had argued that he should be entitled to exit the deal because of representations Twitter had made regarding spam and bots on the platform, but legal experts said Musk had waived due diligence by proceeding with the deal.“This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning versus Twitter board was highly unlikely,” Dan Ives, an analyst with Wedbush Securities, wrote in a note Tuesday. “This $44 billion deal was going to be completed one way or another.”
Twitter has been thrust into internal chaos this year as it has faced a tumultuous stock decline and an increasingly uncertain future with Musk. Many senior executives and rank-and-file workers have left the company or have been fired.
The billionaire chief executive of Tesla took a large stake in Twitter this spring and launched a hostile takeover bid in April. The company first seemed hesitant to accept his offer but eventually acquiesced.
While Musk’s interest in owning Twitter initially seemed surprising, one motivation for his purchase was made clearer in text messages revealed in court documents last week: He was increasingly frustrated with what he saw as the encroachment on free speech by online content moderation decisions. Musk said in a TED interview in April that he wanted an “inclusive arena for free speech.”
He also said he would reverse the ban on former president Donald Trump, saying at an event in May that it “was a morally bad decision, to be clear, and foolish in the extreme.” Twitter permanently banned Trump after the Jan. 6, 2021, insurrection.
The text messages also show that Twitter co-founder and former chief executive Jack Dorsey was one of Musk’s biggest supporters in the process and was often at odds with the board, which was often scrambling to understand Musk and his motives. The texts reveal an elite cast of characters, including celebrities, high-profile investors and media barons, who gave Musk input on the deal, made hiring suggestions and sometimes encouraged him to let right-wing figures who were banned by Twitter back on the platform.
But the outspoken executive, who has more than 107 million followers on Twitter, moved to back out of the deal months later, arguing that he had a right to drop out of the agreement because Twitter hadn’t given him enough information about the company’s business.
Twitter and Musk have been locked in litigation ever since.
Musk soured on the deal amid economic pressures, as the impact of his offer caused a blow to Tesla’s stock – the key source of his wealth – and his net worth.
The renewed offer was not announced inside Twitter right away, several employees said, speaking on the condition of anonymity, leaving employees to learn about it the same way their users did: on Twitter.
Immediately, employees began to sound off on the platform, expressing shock after months of deliberations. Some conveyed skepticism that the letter was sincere. One employee summed up the mood by saying “Congrats or I’m sorry y’all” in an internal Slack message described to The Washington Post.
The prospect of Musk buying Twitter had already opened rifts among the company’s ranks, as his critical tweets about the company and plans to reverse key policies, including its ban on Trump, rankled many employees. Meanwhile, the company’s value slid amid economic woes and a decline in the social media advertising market, and in July Musk filed to back out of the deal, setting the stage for the court battle.
At least one employee, speaking on the condition of anonymity because they were not authorized to discuss their job, said Tuesday that they can’t imagine staying at the company if Musk becomes owner.
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