Elon Musk again offers to buy Twitter at full price in a major U-turn


New York
CNN

Elon Musk sent a letter to Twitter on Monday offering to follow through on his deal to buy the company at the originally agreed price of $54.20 per share, according to a securities filing on Tuesday.

In the letter, Musk said he would proceed with the acquisition on original terms, pending the receipt of debt financing for the deal and on condition that the Delaware Chancery court stays legal proceedings regarding the attempted Musk’s initial request to withdraw from the agreement and adjourn the upcoming trial over the dispute.

A Twitter spokesperson said in a statement to CNN that the company received Musk’s letter and reiterated its previous statement that “the company’s intention is to complete the transaction at $54.20 per share.” .

Musk on Tuesday night tweeted: “The purchase of Twitter is an accelerator to create X, the application of everything.”

News of the letter was first reported by Bloomberg earlier on Tuesday. Twitter’s stock (TWTR) has been shut down twice, the second time for pending news. After trading resumed, the stock rose more than 20%, topping $51 per share and closing in on the agreed price for the first time in months.

The news comes as both sides prepare to go to trial in two weeks over Musk’s attempt to terminate the $44 billion acquisition deal, which Twitter sued him for. Twitter CEO Parag Agrawal was due to be deposed by Musk’s lawyers on Monday, and Twitter’s lawyers had planned to depose Musk starting Thursday.

It also follows the release on Friday of a trove of personal text messages from Musk about the deal. The posts offered insight into the cast of Silicon Valley insiders and billionaires — from Larry Ellison to members of the Murdoch family — who reached out to him to weigh in and, in some cases, offer funding for the deal.

Such a deal could end a months-long contentious back and forth between Musk and Twitter that has caused massive uncertainty for employees, investors and users of one of the world’s most influential social media platforms.

The ball will now be in Twitter’s court to determine how to respond to Musk’s proposal. Twitter’s board will likely agree to move forward with closing the deal, according to Josh White, an assistant professor of finance at Vanderbilt University.

“The very public saga certainly took its toll on them and Twitter employees,” White said. “It’s best that all parties get the deal done and have a quick and seamless transition. I think it’s going to close quickly.

However, Twitter may not want to halt litigation, under Musk’s proposal, until the deal is formally closed, according to Columbia Law School professor Eric Talley. The company may want to continue the litigation process while it negotiates with Musk, in case its offer to complete the deal fails again.

“Twitter is probably going to say, ‘Listen, we really want to engage you on this… But we still have a trial on October 17 and until this is signed, sealed and delivered, we need to prepare for trial,'” Talley said.

The saga began in April when Musk revealed he had become Twitter’s largest shareholder. Over the next several months, Musk accepted and then backed down from an offer to serve on Twitter’s board, threatened a hostile takeover of the company, signed an agreement to buy the company, started raising concerns about bots on the platform, tried to end the deal, was sued by Twitter for following through on the deal, and added a Twitter whistleblower’s allegations to his argument.

Musk initially decided to terminate the deal citing allegations that the company misreported the number of spam and fake bot accounts on the platform. Twitter claimed Musk broke the deal and was using bots as a pretext to get out of a deal he had caused buyer’s remorse over after the broader market drop, which also hurt Tesla stock. and, by extension, Musk’s personal wealth.

Throughout the back and forth, Twitter had maintained that it planned to follow through on the deal at the originally agreed price and terms.

Many legal experts said Twitter has the strongest case in court, and Musk would face a significant burden trying to prove that the company made materially misleading statements in its securities filings or in the security agreement. transaction.

The lawsuit was the last remaining obstacle to closing the deal, after Twitter shareholders voted last month to approve the deal. The deal was originally expected to close this month.

With news that the deal may end up being closed, attention could once again turn to what Musk’s vetting could mean for the social media platform.

Musk previously suggested a series of potential changes to Twitter, the biggest of which could be former President Donald Trump’s return to the platform and the removal of permanent account bans. Musk also said he wants to make Twitter more open to “free speech” and may change its content moderation policies.

Twitter employees have also raised questions about what a Musk takeover could mean for benefits such as remote work and parental leave.

Twitter’s general counsel, Sean Edgett, said in a message to employees on Tuesday that the company had received Musk’s letter and expected to close the deal at $54.20 per share. “I will continue to update you on important updates, but in the meantime, thank you for your patience as we work through the legal stuff,” he said, according to a copy of the message obtained by CNN.

Blind, an anonymous private forum popular among Twitter employees, was abuzz on Tuesday amid reports of Musk’s ousting. The reaction on the forum has been overwhelmingly negative, according to screenshots provided to CNN by a Twitter employee.

“Cue the layoffs,” read one comment. Several other employees have expressed concern that Musk will roll back Twitter’s benefits, including the severance package offered to departing employees.

–CNN’s Donie O’Sullivan contributed to this report.

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