Elon Musk has offered to complete his proposed $44bn (£38bn) acquisition of Twitter in a dramatic U-turn on his decision to walk away from the deal.
Lawyers for Musk confirmed in a court filing on Tuesday that the world’s richest man is prepared to push ahead with the transaction on the agreed terms following months of legal drama.
The filing followed a report from Bloomberg on Tuesday that the Tesla chief executive had written to Twitter offering to close the deal at the original price of $54.20 a share, which resulted in a temporary suspension of trading in the company’s stock as the price rocketed more than 12% in New York. The shares closed up 22.2% at $52.
Musk had been set for a courtroom showdown with Twitter on 17 October, with multiple legal commentators warning he had a slim chance of succeeding in his attempt to scrap the deal.
“We write to notify you that the Musk parties intend to proceed to closing of the transaction,” read the notice, filed by Musk’s lawyers with the Delaware chancery court, which was overseeing the trial. The filing added that the adjournment of the Delaware trial and securing of debt financing were preconditions.
In response, Twitter said: “The intention of the company is to close the transaction at $54.20” – although it did not give more specific details in its response to Musk’s about-turn.
The Wall Street Journal reported on Tuesday that Musk had made the proposal to Twitter’s lawyers overnight on Monday and had filed a letter with the Delaware chancery court before an emergency hearing on the deal on Tuesday.
Twitter issued this statement about today's news: We received the letter from the Musk parties which they have filed with the SEC. The intention of the Company is to close the transaction at $54.20 per share.
— Twitter Investor Relations (@TwitterIR) October 4, 2022
Anat Alon-Beck, a law professor at Case Western Reserve University in Ohio, said Musk appeared to be “finally listening to his lawyers”. Musk was due to be questioned under oath by Twitter lawyers on Thursday and Friday as part of preparations for the Delaware trial. “He will be a fool to not at least try to buy the company now and avoid [a deposition],” said Alon-Beck, claiming that Musk “has no defence on trial”.
Although Musk’s filing has eliminated the impending trial, the sale process is not over yet, Alon-Beck said.
“It’s not like this is going to be cleared up tomorrow,” she said. “The parties still have to approve everything, sign and finalise the deal, and Musk still has to come up with funds to close it.”
Musk tweeted on Tuesday that buying the company would be an “accelerant” to “creating X, the everything app”, adding the process would be accelerated by up to five years without giving further details.
Buying Twitter is an accelerant to creating X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
Musk’s initial argument in reneging on his offer to buy the company was that it had miscounted the number of spam or bot accounts on its platform.
However, last month the Delaware judge hearing the case agreed to let Musk expand his lawsuit to include claims from a whistleblower, Peiter “Mudge” Zatko, who had been fired as Twitter’s head of security this year but had claimed that the company was “grossly negligent in several areas of information security”.
Twitter denied it miscounted the number of spam accounts, or vexatious accounts not operated by human users, and said Zatko’s claims were “riddled with inconsistencies and inaccuracies and lack important context”.
Twitter has also been scathing about Musk’s behaviour. In its lawsuit demanding he close the deal on the agreed terms, it said Musk’s behaviour was “a model of bad faith” and accused him of treating the sale process as an “elaborate joke”.
This week a Delaware court filing disclosed text messages between Musk and others including the CEO of Twitter, Parag Agrawal. They showed how the relationship between Agrawal and Musk soured quickly this year, with the Tesla CEO asking his Twitter counterpart: “What did you get done this week?” In another text the podcaster Joe Rogan asked Musk whether he would “liberate Twitter from the censorship happy mob”.
