Elon Musk has reversed course and is again proposing to buy Twitter for $54.20 a share, according to sources familiar with the matter. A deal could happen as soon as Friday, the sources added.
A few weeks after Musk agreed to the deal earlier this year, valuing Twitter at $44 billion, he quickly tried to back out, officially informing the company in July of his intentions to terminate the agreement. Twitter sued Musk to force him to go through with the purchase. The two sides were scheduled to go to trial in Delaware Chancery Court on Oct. 17.
Musk alleged that Twitter was misstating the number of “bots” on its service as one of the reasons he was reneging on the deal. He and his lawyers claimed the social media company was misleading investors by providing false numbers in corporate filings with the Securities and Exchange Commission.
Twitter countered, however, that Musk’s assertions of fraud were incorrect and were based on a misunderstanding of the way the company tallies bots and fake accounts on its platform.
Musk also alleged Twitter failed to provide him with the necessary data related to spam and bots, which Twitter denied.
Twitter alleged Musk was looking for a reason to back out of the deal when the company’s shares dropped alongside a broader decline in the overall market.
Although Musk sought to delay the trial date, Delaware Chancellor Kathaleen McCormick rejected his wish citing the potential for Twitter to incur “irreparable harm.” The chancellor did allow Musk and his attorneys to amend their counterclaim to include certain accusations made by Twitter’s former head of security in a separate whistleblower suit against the company.
CNBC has learned that Musk could own Twitter within a matter of days and that all litigation would come to an end.
In September, Twitter shareholders approved Musk’s original bid to purchase the company.
Meanwhile, Tesla shares have dropped about $10 per share (about 4%) on the news so far Tuesday and are up about 1% for the day.
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