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.