Wilmington, Del: Elon Musk and Twitter Inc. may reach an agreement in the coming days to end their litigation, paving the way for the world’s richest man to close a $44 billion deal for the social media firm. will happen, a source familiar with the matter told Reuters. ,
Musk, who is also the chief executive officer of electric car maker Tesla Inc., proposed on Twitter late Monday that if Twitter dropped the lawsuit against him, he would buy the company for $54.20 per share in his April. will comply with the agreement.
Sources said the two sides were expected to reach an agreement by Wednesday, but talks are on with a proposal that is expected to take longer.
However, Twitter’s legal team has yet to accept the settlement, and Delaware Court of Chancery Judge Chancellor Kathleen McCormick said she was preparing for an upcoming trial.
McCormick wrote in court Wednesday, “The parties have not filed a condition for a stay of this action, nor has either party moved for a stay. Therefore, I would like our trial to begin on October 17, 2022.” I’ll keep moving towards the set.” filing.
Musk’s offer on Monday included a stipulation pending receipt of debt financing when the deal closed. The potential settlement is likely to remove that condition, said the source, who requested anonymity because the discussions are confidential.
Twitter’s legal team and lawyers for Musk updated the judge on Tuesday with their efforts to find a process to remove mutual mistrust and close the deal.
Two firms that were partially interested in funding the deal, Apollo Global Management Inc. and Sixth Street Partners, had ended talks to provide up to $1 billion combined, two sources told Reuters.
An attorney representing the proposed class action against Musk on behalf of Twitter shareholders said in a letter to McCormick that Musk should be required to make a “substantial deposit” if he reneged on his commitment to shut down again. Is. Lawyer Michael Hanrahan’s letter states that he should also be liable for interest for delays in closing the deal.
It’s unclear whether Musk’s legal team offered to settle, but Musk is due to appear in Austin, Texas, on Thursday. The inquiries are expected to be tough, which leverages Twitter in talks to close the deal.
Twitter shares fell 1.3% on Wednesday to close at $51.30. The stock rose to its all-time high on Tuesday since Musk and Twitter agreed in April to buy the company for $54.20 per share.
a distraction
Tesla stock fell 3.5% on Wednesday as investors worry Musk may have to sell more shares in the electric carmaker to fund the Twitter deal and be a distraction for the Twitter entrepreneur.
Musk sold $15.4 billion worth of Tesla stock this year, but analysts said he may have to raise an additional $2 billion to $3 billion, provided the rest of his financing remains unchanged.
Musk said in July that he was walking away from the acquisition deal after he learned that Twitter had misled him about the amount of alleged fake accounts, among other claims.
Part of Musk’s case was based on allegations by Twitter whistleblower Peter “Mudge” Zatko, which went public in August, and Musk’s legal team on Wednesday rejected the idea that he had made his concerns public before they went public. Had inappropriate conversations with or spoke to Zatko.
Twitter’s legal team wants to investigate whether Alex Spiro, an attorney for the law firm Quinn Emanuel who led Musk’s case, communicated with the whistleblower in early May.
Twitter lawyers suspected that Zatko sent Spiro an anonymous email on May 6. The sender claimed to be a former Twitter employee, offered information about the company and suggested alternative means of communication.
Spiro said in a filing in court on Wednesday that he did not read the email until Twitter brought it to his attention and that someone appeared to be looking for a job. Spiro also said that he was unaware of the existence of Zatko’s allegations before they went public on August 23.
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