Tuesday, November 29, 2022

Musk, Twitter could reach deal to end court battle, close buyout soon

Musk, Twitter could reach deal to end court battle, close buyout soon

CALIFORNIA (Reuters) - Elon Musk and Twitter Inc may reach an agreement to end their litigation in coming days, clearing the way for the world's richest person to close his $44 billion deal for the social media firm, a source familiar with the matter told Reuters.

Musk, who is also chief executive officer of electric car maker Tesla Inc (TSLA.O), proposed to Twitter late on Monday he would change course and abide by his April agreement to buy the company for $54.20 per share, if Twitter dropped its litigation against him.

In their effort to end the litigation, the two sides agreed to postpone the billionaire's deposition in court scheduled for Thursday, the source said on Wednesday, but negotiations are continuing with a full resolution expected to take more time.

However, Twitter's legal team was yet to accept any agreement and Chancellor Kathaleen McCormick, the judge on Delaware's Court of Chancery, earlier in the day said she was preparing for the looming trial.

"The parties have not filed a stipulation to stay this action, nor has any party moved for a stay. I, therefore, continue to press on toward our trial set to begin on Oct. 17, 2022," McCormick wrote in a Wednesday court filing.

Musk's proposal on Monday included a condition that the deal closing was pending the receipt of debt financing. The potential agreement would likely remove that condition, said the source, who requested anonymity as the discussions are confidential.

Twitter's legal team and lawyers for Musk updated the judge on Tuesday with their attempts to overcome mutual distrust and find a process for closing the deal.

Two firms that were interested in partly financing the deal, Apollo Global Management Inc (APO.N) and Sixth Street Partners, had ended talks to provide up to a combined $1 billion, two sources told Reuters.

An attorney representing a proposed class action against Musk on behalf of Twitter shareholders said in a letter to McCormick that Musk should be required to make a "substantial deposit" in case he again reneges on his commitment to close. He should also be liable for interest delaying the closing of the deal, said the letter from attorney Michael Hanrahan.

Representatives of Musk and Twitter held several unsuccessful talks in recent weeks about a possible price cut to his $44 billion deal to buy the social media platform before he reversed course on Monday, the New York Times reported on Wednesday.