Elon Musk is ready to buy Twitter for $44 billion after all, resuming a deal he has spent months trying to back out of and potentially averting a bruising courtroom battle that was about to kick into high gear.
The Tesla CEO intends to “proceed to closing of the transaction” for $54.20 per share, lawyers representing Musk wrote in a letter to Twitter on Monday.
The letter, disclosed in a filing with the SEC on Tuesday, said Musk would move forward “provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk … and adjourn the trial and all other proceedings.”
Twitter sued Musk in July after he declared that he was terminating the deal because of what he claimed were “false and misleading misrepresentations” by Twitter, particularly with respect to the number of fake bots on the social media platform.
Twitter’s shares rose more than 20% after news of Musk’s about-face became official, closing Tuesday’s regular trading session at $52, slightly below the deal price.
Musk’s lawyers did not explain in the letter what prompted the change of mind, and Musk, a prolific tweeter, was silent on Tuesday. Twitter confirmed receiving the letter and re-stated its intention of closing the transaction at the agreed upon price of $54.20.
The trial between Musk and Twitter was scheduled to begin in Delaware on Oct. 17.
The litigation has already resulted in the release of Musk’s personal text messages relating to the deal. The messages released in court filings revealed private conversations between Musk and other Silicon Valley and Wall Street power-brokers, including Twitter founder Jack Dorsey, Oracle Chairman Larry Ellison, and venture capital investor Reid Hoffman.
Musk’s surprise move to resume the acquisition represents the latest twist in one of the most bizarre, and potentially consequential, business sagas of the year. Musk, the world’s richest person, has stated his intention to remove restrictions on what users can say and post on the 330-million user social media platform.
He has also said that he would allow former President Donald Trump back onto the platform, after he was permanently suspended following the Jan. 6 Capitol insurrection because of the “risk of further incitement of violence.”
“I think it was a morally bad decision, and foolish in the extreme,” Musk said at a Financial Times conference in May. “I would reverse the permaban [on Trump].”
Musk offered to buy Twitter in April after becoming one of its biggest shareholders and rejecting his spot on the social media company’s board. His offer was met with resistance, and Twitter went so far as to take a so-called poison pill—a move to make a company less appealing to a prospective buyer—in an effort to keep him at bay. But after securing $44 billion in financing, Musk successfully won his bid.
Shortly after Musk’s bid was accepted, the stock market fell sharply amid economic uncertainties tied to rising inflation and the war in Ukraine. By July, when Musk sought to back out of the deal, Twitter’s shares were trading about 30% below the deal price.
In July, Musk said he had decided to hold off on the deal, claiming without evidence that Twitter had given misleading information regarding the number of “human” users on the platform, and saying that the number of bot accounts on the site was a major problem.
Despite a non-disparagement clause to the deal, Musk frequently criticized top executives at Twitter, and accused the company of censoring free speech.
Twitter sued Musk in a Delaware court in July to make him go through with the purchase.
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