Musk, Twitter may reach deal to end court battle as early as Wed: Report

Elon Musk and Twitter Inc may reach an agreement to end their litigation as soon as Wednesday and clear the way for the world’s richest person to close his $44 billion deal for the social media platform, a source familiar with the litigation told Reuters.

Musk, who is also chief executive officer of electric car maker Tesla Inc, 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.

Musk’s proposal on Monday included a condition that the deal closing was pending the receipt of the necessary 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 try to overcome mutual distrust and find a process for closing the deal.

Musk is scheduled to be deposed on Thursday in Austin, Texas.

Musk canceled a deposition in late September, citing concerns about a Twitter attorney’s possible exposure to someone who later tested positive for COVID-19, according to a court filing made public on Wednesday.

Shares of Twitter were down 0.7% at $51.63 on Wednesday afternoon. The stock on Tuesday hit its highest level since Musk and Twitter agreed in April that he would buy the company for $54.20 per share.

Musk said in July he was walking away from the takeover agreement because he discovered Twitter had allegedly misled him about the amount of fake accounts, among other claims.

Part of Musk’s case was based on allegations by Twitter whistleblower Peiter “Mudge” Zatko that became public in August.

Twitter’s legal team has wanted to investigate if Quinn Emanuel lawyer Alex Spiro, who has led the case for Musk, communicated with the whistleblower as early as May. The law firm has said in court filings its attorneys did not communicate with Zatko or his representatives.

Spiro did not immediately respond to a request for comment.

Twitter uncovered an anonymous May 6 email to Spiro from “a former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation,” according to court documents. The sender offered to communicate “via alternate means.” Zatko, who was head of Twitter security until he was fired in January, has said under oath he did not communicate with Musk or Musk’s attorneys at Quinn Emanuel.

The judge, Chancellor Kathaleen McCormick of Delaware’s Court of Chancery, said in a Monday ruling it is “at least plausible” Zatko sent the anonymous email. She ordered Spiro to file by 4:30 p.m. EDT on Wednesday a statement with the court explaining his actions regarding the May 6 email.

A win-win for big-name investors like Carl Icahn

Elon Musk’s decision to end his war with Twitter isn’t just a big win for the social-media company, but also for some big-name investors like Carl Icahn.

Icahn quietly amassed a Twitter stake of well over $500 million in the past few months and made a sizable profit Tuesday after the shares shot up on news that Musk offered to close his $44 billion purchase of the social-media giant on the original terms, according to people familiar with the matter.

Twitter shares jumped 22% to $52 Tuesday. Icahn paid in the mid-$30 a share for the stake, the people said, meaning the estimated profit for his Icahn Enterprises could exceed $250 million.

Other big-name investors including DE Shaw Group and Daniel Loeb’s Third Point also placed bets on Twitter shares in recent months and could notch sizable gains of their own, other people familiar with the matter said. Icahn made the investment on the belief the billionaire Tesla chief wouldn’t go through a trial that he looked likely to lose, some of the people said.

Icahn also believed that the stock was worth close to the mid-$30s anyway in the long term, meaning the downside would be limited even if Musk prevailed at trial.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)