Technology
Tuesday, October 4th, 2022 1:15 pm EDT
Elon Musk has reversed course and is again proposing to buy Twitter for $54.20 a share, according to a regulatory filing on Tuesday. Twitter shares closed up more than 22% on the news.
The social media company issued a statement saying it had received the letter and said, “The intention of the Company is to close the transaction at $54.20 per share.”
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A deal could happen as soon as Friday, sources told CNBC. The stock was halted earlier in the day after Bloomberg first reported on the Tesla CEO’s plans to go forth with his deal to acquire the company.
The SEC filing says Musk sent a letter to Twitter on Monday, notifying the company of his intent to proceed with the transaction agreed upon on April 25, the day the deal was publicly announced.
A few weeks after Musk agreed to that deal, valuing Twitter at $44 billion, he quickly tried to back out, officially informing the company in July of his intentions to terminate the agreement. Twitter sued Musk to force him to go through with the purchase. The two sides were scheduled to go to trial in Delaware Chancery Court on Oct. 17.
Musk alleged that Twitter was misstating the number of “bots” on its service as one of the reasons he was reneging on the deal. He and his lawyers claimed the social media company was misleading investors by providing false numbers in corporate filings with the Securities and Exchange Commission.
Twitter countered, however, that Musk’s assertions of fraud were incorrect and were based on a misunderstanding of the way the company tallies bots and fake accounts on its platform.
Musk also alleged Twitter failed to provide him with the necessary data related to spam and bots, which Twitter denied.
Twitter alleged Musk was looking for a reason to back out of the deal when the company’s shares dropped alongside a broader decline in the overall market.
Although Musk sought to delay the trial date, Delaware Chancellor Kathaleen McCormick rejected his wish citing the potential for Twitter to incur “irreparable harm.” The chancellor did allow Musk and his attorneys to amend their counterclaim to include certain accusations made by Twitter’s former head of security in a separate whistleblower suit against the company.
In September, Twitter shareholders approved Musk’s original bid to purchase the company.
Meanwhile, Tesla shares closed up nearly 3% for the day.
Here’s the letter that Musk’s lawyer, Mike Ringler of Skadden Arps, sent to Twitter’s lawyers on Oct. 3:
Gentlemen:
On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the “Musk Parties”), we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.
The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close
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