Musk’s proposal to abide by his original plan to buy Twitter is based on the social media company dropping its case against him – but that has yet to happen, Reuters reported.
Elon Musk and Twitter Inc have not yet reached an agreement to end litigation and clear the way for the Tesla and SpaceX founder to close his $44bn deal for the social media platform, two sources familiar with the litigation told Reuters on Wednesday.
Musk, the world’s richest person, told Twitter late Monday that 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.
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.
“Keep an eye on the docket,” said one source.
Musk is scheduled to be deposed on Thursday in Austin, Texas in the United States.
“That’s the pressure point,” said a second source.
Musk cancelled 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 2.5 percent at $50.72 in early trading. The stock hit its highest level on Tuesday since Musk and Twitter agreed in April that he would buy the company for $54.20 per share.
Musk said in July that he was walking away from the takeover agreement because he discovered Twitter had allegedly misled him about its number of fake accounts, among other claims.
Part of Musk’s case was based on allegations by Twitter whistle-blower Peiter “Mudge” Zatko that became public in August.
Twitter’s legal team has wanted to investigate whether law firm Quinn Emanuel’s lawyer Alex Spiro, who has led the case for Musk, communicated with the whistle-blower as early as May. The law firm has said in court filings that its attorneys did not communicate with Zatko or his representatives.
Twitter uncovered an anonymous May 6 email to Spiro from “a former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation”. 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 that 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 that it is “at least plausible” Zatko sent the anonymous email. She ordered Spiro to file a statement by 4:30pm ET (20:30 GMT) with the court explaining his actions regarding the May 6 email.