Twitter Inc. shares were halted in midday trading Tuesday after reports indicated that Tesla Inc. Chief Executive Elon Musk was now proposing to purchase the social-media company at his 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 to Twitter
with the latest proposal to acquire the company for $54.20 a share. Twitter shares were up 13% in midday trading prior to the halt. Trading was first paused due to volatility, and then halted for pending news.
A Wall Street Journal report said that Musk’s legal team relayed the proposal to Twitter’s team “overnight Monday” 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 he later said that he was terminating the deal. The Tesla
chief cited concerns about bot activity on Twitter and said he believed the company’s management team wasn’t accurate 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 Chancery Court judge was expected to hear from both sides in a five-day trial slated to begin Oct. 17.
“This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” wrote Wedbush analyst Daniel Ives. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”