Elon Musk is willing to proceed with his first $44 billion offer for the social media site, giving up his legal fight to withdraw from the purchase of Twitter. The offer was made by the erratic Tesla CEO in a letter to Twitter, which the business disclosed in a filing with the US Securities and Exchange Commission on Tuesday.
The offer comes just two weeks before Twitter’s lawsuit seeking to force Musk to go through with the deal goes to trial in Delaware Chancery Court.
In a statement, Twitter said it intends to close the transaction at $54.20 per share after receiving the letter from Musk.
Musk’s proposal is the latest twist in a high-profile saga involving the world’s richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter itself, with Musk — who has more than 100 million followers — lamenting that the company was failing to live up to its potential as a platform for free speech.
A letter from Musk’s lawyer dated Monday and disclosed by Twitter in a securities filing said Musk would close the merger signed in April provided that the Delaware Chancery Court “enter an immediate stay” of Twitter’s lawsuit against him and adjourn the trial scheduled to begin in two weeks.
By completing the deal, Musk essentially gave Twitter what it was seeking from the court — “specific performance” of the contract with Musk, meaning he would have to go through with the purchase at the original price. The contract Musk signed also has a $1 billion breakup fee.
Eric Talley, a law professor at Columbia University, said he’s not surprised by Musk’s turnaround, especially ahead of a scheduled deposition of Musk by Twitter attorneys starting Thursday that was “not going to be pleasant”.
“On the legal merits, his case didn’t look that strong,” Talley said. “It kind of seemed like a pretty simple buyer’s remorse case.”
If Musk were to lose the trial, the judge could not only force him to close the deal but also impose interest payments that would have increased its cost, Talley said.
Talley was taken aback by the fact that Musk doesn’t seem to be attempting to renegotiate the arrangement. According to Talley, even a little price cut may have given Musk a “moral triumph” and the chance to claim he gained something from the lengthy argument.
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