Representatives of Elon Musk and Twitter Inc. grappling with the terms of an agreement that will enable Buying a social media company moving forward, continuing a months-long drama about the fate of the blockbuster deal.
The discussions are the latest between the two sides as the courtroom clash approaches. They quietly had failed talks about a possible $44 billion price cut for the social media platform before Mr Musk reversed course on Monday and said he will revert to the terms of the original agreement, People familiar with the matter said.
As of late Wednesday, representatives for Mr. Musk and Twitter were trying to hash out the details of his proposal this week into Upholding this original agreement, People familiar with the matter said. Some people said points of contention include what is required from both sides to litigate which stalled deal will be dropped and whether closing the deal will depend on Mr. Musk receiving the necessary debt financing.
There was initially hope that an agreement could be reached on Tuesday or Wednesday, to avoid a The trial is scheduled to begin on October 17, people said. The two sides agreed to postpone Mr. Musk’s briefing, which was due to begin Thursday in Texas, some people said, to continue efforts to reach an agreement on how to proceed.
People said informal discussions about cutting the $44 billion purchase price occurred in a series of phone calls in recent weeks between lawyers that ended after the two sides failed to agree on the terms of a potential deal.
Price-cutting talks had stalled before Mr. Musk caught Twitter off guard by sending a Twitter lawyer a two-sentence letter proposing to go ahead with the original terms.
Mr. Musk’s apparent change on Monday surprised many observers. The CEO of Tesla Inc. the past several months Trying to undo the deal After he allegedly misled Twitter about key elements of its business, including the amount of spam on its platform.
In July, Mr. Musk officially moved to walk away from the deal, Twitter pushed to sue him To pursue the transaction on the agreed terms. Mr. Musk disputed, claiming that Twitter misinterpreted the state of its business and key metrics about users on its platform, which Twitter denied.
Currently, Delaware District Judge Chancery is leading the legal battle Proceed with preparations for trial.
Chancellor Kathleen McCormick ordered Mr. Musk’s team on Wednesday To search for more possible emails Twitter requested as both sides prepare for a five-day trial without a bench in Wilmington, Dale. She said neither party had moved to stop the litigation.
“Neither parties have made a condition to stop this action, and neither party has made a moratorium,” the judge wrote on Wednesday. “Therefore, I continue to press for the start of the trial, which is scheduled to begin on October 17.”
Musk’s team has been bold in lobbying for extensive information from Twitter, including a range of employee communications, data related to fake accounts and spam. These requests sometimes frustrated Chancellor McCormick. It agreed to some requests but declined others, once calling Musk’s requests for data “ridiculously loose”.
Legal experts have maintained from the outset that Twitter appears to have the strongest case, in part because Mr. Musk waived due diligence before agreeing to the deal and that the merger agreement gave Twitter the right to sue him for pursuing it under a concept called “specific performance.”
However, even the small risk of Mr. Musk winning the trial may be too great for a company the size of Twitter to bear. For this reason, the majority of spoiled deals cases end with negotiated settlements, often with a small price cut. This was the case with the litigation between LVMH Moët Hennessy Louis Vuitton SE and Tiffany & Co in 2020. These parties agreed to cut prices by about 3% to avoid prosecution.
While Twitter’s stock price has held up due to the potential acquisition of Mr. Musk, its performance has fallen. The company reported a decline in revenue in the second quarter and blamed weakness in the advertising industry and uncertainty related to Mr. Musk’s acquisition.
Mr. Musk gave few specifics about his plans for Twitter, but said he wanted to turn Twitter into a private company and unleash what he called its extraordinary potential as a platform for free speech.
write to Cara Lombardo at [email protected] and Alexa Corse at [email protected]
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