Elon Musk tells Twitter he'll go forward with acquisition deal if lawsuit stops
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Elon Musk sent a proposal to Twitter on Monday saying that he is willing to go forward with his acquisition of Twitter at the original price of $44 billion, according to a filing with the Securities and Exchange Commission.
The news, first reported by Bloomberg, sent Twitter's shares up more than 13% in Tuesday trading. Twitter did not immediately respond to a request for comment. Musk could not immediately be reached for comment.
The deal will move forward if the Delaware court currently hearing Twitter's lawsuit against Musk puts an immediate stop to the ongoing litigation, the letter states.
The proposal could end a months-long saga between the two sides that included a lawsuit scheduled to be argued at trial in a Delaware court later month.
"This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another," Wedbush Securities' Dan Ives said in a note to clients Tuesday following the report.
The uncertainty has weighed on some Twitter employees.
"At this point, just do it or don’t," one Twitter employee told NBC News on the condition of anonymity because they were not authorized to speak publicly.
"Living the plot of succession is f------ exhausting," she tweeted, referring to the popular HBO show.
Musk first demonstrated his interest in Twitter in early April when he revealed he had become the company's largest public shareholder; he was also set to take a seat on the social media platform's board of directors.
At the time, Musk's stated reason for pursuing the company was to ensure it would "adhere to free speech principles." He also expressed interest in reinstating former President Donald Trump to the platform.
Musk's involvement in the social media platform was endorsed by Twitter co-founder and former CEO Jack Dorsey, who said Musk could take the company "back from Wall Street."
"I trust his mission to extend the light of consciousness," Dorsey tweeted.
Soon thereafter, Musk decided he would purchase Twitter outright and take it private. On April 14, he offered $54.20 a share, or about $44 billion. At first, Twitter resisted, adopting a so-called "poison pill" policy that would have diluted the price of its shares if Musk attempted to purchase even more of them on the open market. In addition to questions about how Musk would change the platform, some analysts considered Musk's price too cheap.
Then, shares in other tech companies began a steady decline alongside volatility in the broader market. Meanwhile, Musk came up with firm commitments from Wall Street lenders and other investors to fund the deal. By April 25, Twitter decided to reverse course and accept Musk's offer. Twitter and Musk released a joint statement that day extolling the deal, with Musk proclaiming, "Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
But about three weeks later, Musk suddenly announced in a tweet that the deal was "on hold" pending further inquiry into how many users were real versus fake or spam accounts. On June 6, Musk accused Twitter of being in breach of the deal because it had allegedly refused to respond to requests for additional information about the spam account issue, and that he was seeking to break off the agreement.
Twitter responded that the accusation was false and that it intended to close the agreement the two companies had signed.
Unable to address the impasse, Twitter sued Musk in Delaware court — the primary U.S. venue for deciding corporate disputes — on July 12 to enforce the transaction.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” Twitter said in its complaint.
Musk maintained that Twitter's long-running estimate that less than 5% of its accounts were fake appeared to be inaccurate and was grounds for breaking off the deal. He ultimately filed a countersuit accusing the company of fraud, a charge Twitter denied.
That set the stage for the October trial. Since then, the sides have gone back and forth about the parameters of the showdown, including the date itself and what kind of documents and communications could be requested and presented.
An additional complexity was added when a whistleblower came forward to accuse Twitter of security lapses — an accusation Musk subsequently sought to include in his evidence against the company. Twitter sought to fend off that development but was ultimately unsuccessful.
Musk, in turn, failed to delay the trial.
