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 come as soon as Friday, the sources added.
Shares of Twitter rose as much as 15% on Tuesday after Bloomberg first reported plans by Tesla’s CEO to push ahead with his deal to acquire the company. The stock was halted after the report.
Weeks after Musk agreed to the deal earlier this year, valuing Twitter at $44 billion, he quickly tried to backtrack, officially notifying the company in July of his intentions to terminate the deal. Twitter sued Musk to force him to go ahead with the purchase. The two sides were scheduled to go to trial in Delaware’s bankruptcy court on Oct. 17.
Musk alleged that Twitter was misrepresenting the number of “bots” on its service as one of the reasons it reneged 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 responded, however, that Musk’s fraud claims were incorrect and based on a misunderstanding of how the company accounts for bots and fake accounts on its platform.
Musk also alleged that Twitter failed to provide him with necessary data related to spam and bots, which Twitter denied.
Twitter alleged that Musk was looking for a reason to back out of the deal when the company’s stock fell along with a broader decline in the overall market.
Although Musk tried to delay the trial date, Delaware Chancellor Kathaleen McCormick rejected his request, citing the possibility of Twitter causing “irreparable harm.” The chancellor did allow Musk and his lawyers to amend their counterclaim to include certain allegations made by Twitter’s former security chief in a separate lawsuit against the company.
CNBC has learned that Musk could own Twitter in a matter of days and all the litigation would come to an end.
In September, Twitter shareholders approved Musk’s original offer to buy the company.
Meanwhile, Tesla shares are down about $10 per share (about 4%) on the news so far Tuesday and are up about 2% for the day.
