Elon Musk has offered to proceed with the Twitter deal at a price of $54.20 per share, two people familiar with the negotiations said, a stunning development weeks before the two sides were due to face off in a trial over Musk attempting to back out of the deal.
Twitter is considering whether to accept the proposal, and will not act for at least another day, according to one of the people. Because there is great distrust on both sides, Twitter leaders are questioning whether the letter represents a legal maneuvering, this person said.
The offer comes after 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. Twitter took him to court to force him to go through with the deal, and trial in Delaware’s Chancery Court is scheduled for Oct. 17.
Bloomberg first reported news of the offer on Tuesday. Twitter shares were suspended at their highest level in months after the news 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, one of the people said. There is another hearing scheduled later Tuesday.
Analysts said Musk’s move reflects his relatively weak position ahead of the trial. Musk had argued he should be entitled to exit the deal because of representations Twitter had made over 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 faced a rocky time on the stock market and an increasingly uncertain future with Musk.
The billionaire CEO of Tesla took a large stake in Twitter this spring, and launched a hostile takeover bid for control of Twitter 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 had grown 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 there to be an “inclusive arena” free speech.
But the outspoken executive, who has more than 107 million followers on Twitter, moved to back out of the deal just months later, arguing he has 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 immediately announced inside Twitter, one employee said, speaking on the condition of anonymity, leaving employees to learn about it the same way as their users: on Twitter.
Immediately, employees began to sound off on Twitter, expressing shock after months of deliberations. Some expressed skepticism that the letter was sincere. On internal slack messages, one employee summed up the mood saying, “congrats or I’m sorry y’all.”
Will Oremus contributed to this report.