Elon Musk proposes to buy Twitter at original $67 billion price to avoid trial: sources

In a costly turnaround, the Tesla owner is now on the verge of buying Twitter at the original price despite saying he would do no such thing.

Elon Musk has offered to close his original deal to buy Twitter for a whopping $67 billion (US$44 billion) — a bid to avoid a court trial over the hotly contested agreement slated for later this month.

The billionaire Tesla CEO is in talks for a settlement to acquire the social network for US$54.20 per share — the same price he agreed to in April before saying in July he was pulling out of the deal, sources close to the talks told the New York Post.

Twitter shares spiked more than 13 per cent to US$48.13 immediately following an earlier report of Mr Musk’s proposal by financial publications Bloomberg and were halted for pending news. Mr Musk sent a letter to Twitter with the offer, according to Bloomberg.

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There are reports Elon Musk will now buy Twitter at the asking price. (Photo by OLIVIER DOULIERY / AFP)

Mr Musk notified Twitter’s lawyers of the offer to go through with the deal under its original terms late on Monday night, according to a source familiar with the matter.

The two sides worked toward hashing out an agreement in a Delaware Court of Chancery hearing this morning that was closed to the public, the source said.

Another hearing will likely be held this afternoon but it’s unclear whether the judge hearing the case, Chancellor Kathaleen McCormick, will make it open to the public.

Months of bad blood between Twitter and Mr Musk have made Twitter insistent that the Delaware court supervise the closing process in the coming days.

If everything goes as expected and Mr Musk doesn’t try to pull any last-minute “gotchas” on Twitter, the deal should realistically close within days or at most a week, a source familiar with the matter said.

Elon Musk has been saying for months he would not buy Twitter at the price he agreed to. Picture: Samuel Corum/AFP

Twitter’s legal fight against Elon Musk

Twitter sued Mr Musk over his refusal to go through with the deal in a trial that was set to open on October 17. Mr Musk was scheduled to be deposed by Twitter’s attorneys on Thursday and Friday this week, raising the prospect that the last-minute deal was made in part to avoid the deposition.

Twitter CEO Parag Agrawal was deposed on Monday, according to a source close to the situation.

Lawyers for Mr Musk and Twitter both declined to comment.

Less than an hour after the news broke on Tuesday, Mr Musk posted a tweet about SpaceX’s Starling internet service but made no mention of the Twitter news.

Analysts who cover Twitter say that US$54.20 is an astronomically high price to pay for the social media site. Without Mr Musk’s involvement, Twitter would be trading in the US$20 range, analysts say.

Even as rumours swirled for months of Mr Musk negotiating down Twitter’s price, influential Twitter board member and Silver Lake managing partner Egon Durban may have been insistent that he would not accept anything less than $54.20 per share, a source familiar with Durban’s thinking speculated.

If Twitter accepts Mr Musk’s proposal, the company would withdraw its lawsuit against the billionaire in Delaware’s Court of Chancery. Mr Musk would also have to withdraw a countersuit he filed against the company.

Settling for $54.20 per share could also help Musk avoid costly pre-judgment interest payments that could have driven up Twitter’s price by hundreds of millions of dollars.

This story appeared in the New York Post as is reproduced with permission.

Originally published as Elon Musk proposes to buy Twitter at original $67 billion price to avoid trial: sources