Shares of Twitter Inc. were halted in midday trading on Tuesday after reports indicated Tesla Inc. Chief Executive Elon Musk was now proposing to buy the social media company at its original offer price, suggesting a possible end to the legal saga between the two parties.
A Bloomberg News report said that Musk sent a letter on Twitter TWTR,
with the latest proposal to acquire the company for $54.20 a share. Twitter shares were up 13% in midday trading before the halt. Trading first halted due to volatility and then halted due to pending news.
A Wall Street Journal report said Musk’s legal team relayed the proposal to the Twitter team “on Monday night” ahead of an emergency court hearing that was scheduled for Tuesday.
Musk agreed in April to buy Twitter in a deal that valued the company at roughly $44 billion, but later said he would terminate the deal. Tesla’s TSLA,
The chief cited concerns about bot activity on Twitter and said he believed the company’s management team was inaccurate in its public disclosures about the extent of spam activity on the platform.
The two sides have been locked in a legal battle for months, and a Delaware Court of Chancery judge was expected to hear from both sides in a five-day trial scheduled to begin Oct. 17.
“This is a clear sign that Musk acknowledged in the Delaware court that his chances of winning against the Twitter board were very unlikely and that this $44 billion deal was going to be completed one way or another. other,” wrote Wedbush analyst Daniel Ives. “Being forced to make the deal after a long and ugly court battle in Delaware was not an ideal scenario, and instead taking this path and moving forward with the deal will save a huge legal headache.”
