In April, billionaire Elon Musk announced his plans to acquire Twitter
Soon after, Twitter released a statement acknowledging Musk's newest proposal, but it hasn't officially accepted the deal. The social media giant plans to add conditions to the proposal that would prevent Musk from attempting to back out of the deal for a second time, according to The New York Times.
The company may petition the court to force Musk to pay interest on the acquisition price due to his delays and may also request that the court oversee the closure of the deal. Musk could still attempt to throw a last minute wrench into the deal.
The two parties held an emergency virtual hearing with Judge Kathleen McCormick on Tuesday to discuss Musk's proposal. If the deal is agreed to, the acquisition could be completed within the next few weeks. The letter stating Musk's willingness to go through with the original deal was revealed in regulatory filings on Tuesday, just two weeks before Twitter's lawsuit against Tesla's
Twitter sued Musk to try to force him to honor the original acquisition agreement after Musk accused the company of lying about bots on the site. Since then, the two parties have continued to clash online and in court. As a part of his proposal, Musk is asking the Delaware court to "enter an immediate stay" of Twitter's suit.
"I think he recognized that litigation is not going well on his part," professor of corporate governance at Tulane Law School Ann Lipton said of Musk.
That trial would most likely have included testimony from Musk himself as well as top Twitter executives, and Musk is still scheduled to be deposed by Twitter layers on October 6. If a deal isn't completed in time, Twitter could petition the court to delay the suit's trial date. After the deal is closed, the social media company will most likely dismiss the suit.
"I don't think Twitter will give up its trial date on just Musk's word - it's going to need more certainty about closing," Andrew Jennings, professor at Brooklyn Law School, said.
The acquisition uncertainty has been nothing but trouble for the social media company, leading to advertiser hesitation and share price decline. Coming out the other side of this conflict with the original $54.20 per share acquisition price would be a major win for Twitter. Since the deal was first proposed, the economic landscape has shifted, and investment in Twitter has chilled.
That changing landscape has also put the banks backing Musk's Twitter acquisition in a bad position. Musk will cover much of the cost of the deal himself, but major institutions have pledged $12.5 billion. Selling that debt is going to be a significant challenge for the banks.
"From the banks' perspective, this is less than ideal," said analyst Dan Ives with Wedbush Securities. "The banks have their backs to the wall - they have no choice but to finance the deal."
After months of confusion, Twitter employees learned about the acquisition proposal being reintroduced from the news. At the time the story broke in the media, the employees were participating in a companywide meeting about Twitter's plans for 2023. Employees present told The New York Times that Twitter's CEO Parag Agrawal didn't respond to employee questions about the recent offer.
"I will continue to keep you posted on significant updates, but in the meantime, thank you for your patience as we work through this on the legal side," Twitter wrote in an email to its workers on Tuesday afternoon.
Workers are concerned about the possible impact this conflict could have on their stock compensation. Specifically, it the company's executives decline the offer, Twitter stocks could plummet in value.
The site has long been a platform for Musk and other powerful figures to spread their controversial and sometimes dangerous views, and Musk's takeover could also lead to major changes to how those posts are monitored.
"Buying Twitter is an accelerant to creating X, the everything app," Musk tweeted on Tuesday, referencing X, the name of the holding company he formed to purchase Twitter.
