SAN FRANCISCO: Billionaire Elon Musk is proposing to go ahead with his original offer of US$44 billion (RM204 billion) to take Twitter Inc private, a securities filing showed on Tuesday (Oct 4), signalling an end to a legal battle that could have forced Musk to pay up.
An agreement would put the world’s richest person in charge of one of the most influential media platforms and end months of litigation that damaged Twitter’s brand and fed Musk’s reputation for erratic behaviour.
Musk, the chief executive of electric car maker Tesla Inc, will take over a company he originally committed to buying in April, but soon soured on.
Twitter shares jumped 22.2% to close at US$52.00, while Tesla shares gained 2.9% to US$249.44.
The news comes ahead of a highly anticipated face-off between Musk and Twitter in Delaware’s Court of Chancery on Oct 17, in which the social media company was set to seek an order directing Musk to close the deal for US$44 billion.
Musk sent Twitter a letter on Monday that said he intended to proceed with the deal on the original terms if the Delaware judge stayed the proceedings. A source familiar with Twitter’s team told Reuters that at a court hearing on Tuesday morning the judge requested the two sides report back in the evening.
It was not immediately clear why Musk chose to abandon his fight. He was about to be deposed, which could have included tough questioning. “He was about to get deposed and a lot of uncomfortable facts were going to come out,” said Eric Talley, a professor at Columbia Law School.
Twitter received Musk’s letter and intended to close the deal at the original US$54.20 price, a spokesperson told Reuters. Twitter did not say whether it accepted Musk’s offer.
Musk, one of Twitter’s most prominent users, said in July he could walk away without penalty because the number of bot accounts was much higher than Twitter’s estimate of less than 5% of users. Bots are automated accounts, and their use can lead to overestimations of how many humans are on the service, which is important for advertising rates and the overall value of the service.
A settlement between the two sides would revive fears among Twitter’s users about Musk’s plans for the platform, which has removed prominent politically conservative voices.
Bloomberg was the first to report Musk was willing to pay the original price.
A settlement at the original price would also allow Musk to finance the transaction without any complications. If Musk and Twitter had renegotiated the price, it would have technically allowed committed backers to walk away. – Reuters
