According to a source familiar with the situation, Elon Musk and Twitter Inc. may reach a settlement to terminate their legal dispute in the upcoming days, paving the way for the world’s richest person to complete his $44 billion acquisition of the social media company.Â
Musk, who is also Tesla Inc.’s chief executive officer, suggested to Twitter late on Monday that in exchange for Twitter dropping its legal action against him, he would reverse direction and stick to his April deal to purchase the business for $54.20 per share.Â
Although a settlement to the dispute is going to take longer than expected, the two parties had hoped to reach an agreement as soon as Wednesday, according to the source.
The deal has not yet been accepted by Twitter’s legal team, and Chancellor Kathaleen McCormick, a judge in the Delaware Court of Chancery, stated that she was getting ready for the impending trial.
“No one has moved for a stay, and the parties have not submitted a stipulation to do so. I thus keep working for our trial, which is scheduled to start on October 17, 2022. In a court filing on Wednesday”, McCormick wrote.
The purchase’s completion was contingent upon receiving debt funding, according to Musk’s Monday proposal. The source, who asked to remain anonymous because the conversations are private, stated that the possible deal would probably eliminate that provision.
On Tuesday, Musk’s attorneys and Twitter’s legal team provided the judge with updates on their efforts to overcome their mutual mistrust and find a method for concluding the purchase.
According to two people speaking to Reuters, negotiations between Apollo Global Management Inc. and Sixth Street Partners, two companies interested in providing up to a combined $1 billion in financing for the transaction, have come to an end.
According to a lawyer representing Twitter shareholders in a potential class action against Musk, who wrote this in a letter to McCormick, “This is in the case of Musk breaking his promise to shut down yet again.” According to the letter from attorney Michael Hanrahan, he should also be held accountable for any delay in the deal’s conclusion.
Although it is unknown what prompted Musk’s legal team to make a settlement offer, Musk is due to give a deposition on Thursday in Austin, Texas. Since severe interrogation is anticipated, Twitter will have to negotiate power to clinch the agreement.
On Wednesday, Twitter’s stock price fell 1.3% to $51.30. Tuesday was the stock’s highest level since Musk and Twitter agreed that he would purchase Twitter for $54.20 per share in April.
An Interruption
Investors’ concerns that Musk may need to sell additional Tesla stock to pay for the Twitter transaction and that Twitter may become a source of distraction for the businessman caused the stock to close the day 3.5% down on Wednesday.
Although economists predicted that Musk would only need to raise an additional $2 billion to $3 billion if the rest of his finances remained the same, he sold $15.4 billion worth of Tesla shares this year.
In July, Musk declared he was pulling out of the takeover deal after learning that, among other things, Twitter had allegedly lied to him about the number of false accounts.
Peiter “Mudge” Zatko, a Twitter whistleblower, made charges that were made public in August that formed the basis of a portion of Musk’s complaint. Musk’s legal team denied on Wednesday that they had improper conversations with Zatko or talked to him before his concerns were made public.
The legal team at Twitter has been looking into whether Musk’s lead attorney, Alex Spiro of Quinn Emanuel, had contact with the whistleblower as early as May.
Twitter’s legal team was concerned that Spiro received an anonymous email from Zatko on May 6. The sender, who identified themselves as a former Twitter employee, provided information on the business and advised contacting them in another way.
Spiro said in a document submitted to the court on Wednesday that he didn’t even open the email until it was shared on Twitter and revealed to be from someone who looked to be looking for work. Spiro said that prior to the charges made by Zatko becoming well-known on August 23, he was not aware of their existence.
