Billionaire Elon Musk has offered to buy Twitter at an initial offer price of $54.20 per share, avoiding a possible court dispute over one of the most controversial acquisitions in recent history.
Musk made the offer in a letter to Twitter, according to people familiar with the matter, who spoke on condition of anonymity while discussing classified information. As a result of this news, Twitter shares rose by 18% before trading was suspended.
Representatives for Musk and Twitter in San Francisco did not immediately respond to requests for comment.
Musk’s offer to stick to the terms of the original deal means Twitter faces a future under the leadership of a wealthy billionaire who has spent months publicly criticizing its management and questioning its value. It also means that his claims about the proportion of fake accounts in total Twitter users – for example – are unlikely to hold up in court.
For months, Musk has been trying to back out of his April deal to buy Twitter. Musk began showing signs of regretting his purchase shortly after the deal was announced, claiming Twitter had misled him about the size of its user base and the prevalence of bot accounts.
Musk officially pulled out of the deal in July, and Twitter sued him in Delaware Crown Court to force him to buy out. The trial is scheduled to begin on October 17. In the weeks leading up to that standoff, lawyers for both sides fired subpoenas at each other in an effort to obtain testimony and evidence.
Musk’s side must prove that Twitter breached the terms of the contract. While the social media platform claimed that Musk used the issue of fake accounts as an excuse to back out of a deal that was no longer economically viable.
According to a person familiar with the matter, Musk’s legal team felt the case was not going well and that Judge McCormick would favor Twitter in pretrial rulings. Even with the late appearance of a Twitter whistleblower who claimed executives were unprepared for security issues and automated accounts, there were concerns that Musk’s team could not prove Musk’s negative impact, which is the legal standard required to terminate a contract.
Twitter shareholders voted on September 13 to accept a takeover offer made by Elon Musk. The company announced at the time that 98.6 percent of the votes had reached an agreement. Musk, Twitter’s biggest contributor ever, did not vote on the decision, according to two people familiar with the decision. When Musk agreed to take over the company, he owned nearly 10 percent of Twitter’s stock, or more than 73 million shares.
Musk was scheduled to be questioned about the deal on Oct. 6 and 7 in Austin, Texas, according to Tuesday’s court filing. Twitter CEO Parag Agrawal was expected to testify on Monday.
Case No. “Twitter v. Musk, 22-0613” Delaware Crown Court.
Source: Lebanon Debate
