Elon Musk has sent a proposal to Twitter saying he is ready to pursue his acquisition of the company at the initial price of $44 billion, according to a letter from Musk’s attorney filed with the Securities and Exchange Commission on Tuesday.
The news, first reported by Bloomberg, sent shares of Twitter soaring as much as 22% on Tuesday after trading for several hours. Musk could not immediately be reached for comment.
The deal will move forward if the Delaware court currently hearing Twitter’s lawsuit against Musk ends the case immediately, Musk said in his proposal to Twitter on Monday.
Twitter said in a statement, “We have received the letter from the Musk parties which they have filed with the SEC. The Company’s intention is to close the transaction at $54.20 per share.”
The proposal could end a month-long saga between the two sides that included a lawsuit that was to be argued at a trial within a month in Delaware court.
“It’s a clear sign that Musk admitted going to court in Delaware that the odds of winning against Twitter’s board were highly unlikely and that this $44 billion deal was going to be done in a way or another,” Dan Ives of Wedbush Securities said in a note. to clients on the Tuesday following the report.
Uncertainty weighed on some Twitter employees.
“At this point, do it or don’t,” a Twitter employee told NBC News on condition of anonymity because he was not authorized to speak publicly.
Rumman Chowdhury, director of machine learning ethics, transparency and accountability at Twitter, tweeted similar frustrations.
“Living through the plot of the estate is f—— exhausting,” she said. tweetedreferencing the popular HBO show.
Musk first showed interest in Twitter in early April when he revealed he had become the company’s largest public shareholder. he was also set to sit on the social media platform’s board of directors.
At the time, Musk’s reason for suing the company was to ensure it would “respect the principles of free speech.” He also expressed interest in bringing former President Donald Trump back to the platform.
Musk’s involvement in the social media platform has been endorsed by Twitter co-founder and former CEO Jack Dorsey, who said Musk could take over the business “from Wall Street”.
“I trust his mission to expand the light of consciousness,” Dorsey tweeted.
Soon after, Musk decided to buy Twitter and make it private. On April 14, it offered $54.20 per 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 tried to buy even more of them on the open market. In addition to questions about how Musk would change the platform, some analysts felt Musk’s price was too cheap.
Then, shares of other tech companies began to steadily decline alongside broader market volatility. Meanwhile, Musk has offered firm commitments from Wall Street lenders and other investors to fund the deal. On April 25, Twitter decided to backtrack and accept Musk’s offer. Twitter and Musk released a joint statement that day touting the deal, with Musk proclaiming, “Twitter has tremendous potential – I look forward to working with the company and the user community to unlock it. “
But about three weeks later, Musk suddenly announced in a tweet that the deal was “on hold” pending further investigation into the number of real users versus fake or spam accounts. On June 6, Musk accused Twitter of violating the agreement because it allegedly refused to respond to requests for additional information about the spam account issue and sought to breach the agreement.
Twitter replied that the accusation was false and that it intended to terminate the agreement the two companies had signed.
Unable to resolve the impasse, Twitter sued Musk in court in Delaware – the main US venue for deciding corporate disputes – on July 12 to enforce the settlement.
“Having staged a public spectacle to put Twitter on the line, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he – unlike all other parties subject to Delaware contract law – is free to change of opinion, throw the company, disrupt its operations, destroy shareholder value and walk away,” Twitter said in its complaint.
Musk argued that Twitter’s long-standing estimate that less than 5% of its accounts were fake seemed inaccurate and was grounds for breaking the deal. He eventually filed a countersuit accusing the company of fraud, a charge Twitter denied.
This set the stage for the October trial. Since then, the parties have gone back and forth on the parameters of the confrontation, including the date itself and the type of documents and communications that could be requested and presented.
Further complexity was added when a whistleblower came forward to accuse Twitter of security breaches – a charge Musk later sought to include in his evidence against the company. Twitter sought to push back against this development, but ultimately failed.
Musk, in turn, failed to delay the trial.