Beijing time on October 11th news,Just days before Elon Musk’s renewed offer to buy Twitter at “the original price”, the two sides discussed a deal at a discount of $50 per share, but Musk ultimately declined, people familiar with the matter said.
The $50 per share price offered Musk about an 8% discount compared to the initially agreed $54.20 per share, a saving of more than $3.3 billion (about 23.6 billion yuan) over his original total offer of $44 billion. ).
While they have discussed other prices, two people familiar with the matter said $50 a share was a price the two sides had discussed repeatedly in the last week. However, talks between the two sides quickly fell apart, something Musk often does when negotiating with Twitter and its executives. As of Monday’s close, Twitter shares rose 2.40% to close at $50.36.
Why give up lower prices?
Musk ultimately settled on a deal at the original price and original terms of $54.20 a share because he rejected the deal that Twitter executives and board of directors were renegotiating, Musk’s lawyer Alex Spiro said. “All sorts of things” required to be added in.
“They want carrots, but not sticks,” Spiro said.
Spiro did not disclose the specific request made by Twitter. However, the main sticking point in the months-long tormenting negotiations between the two sides has been Musk’s allegations that Twitter has mischaracterized the number of “bots” or inauthentic accounts on its platform. Musk’s lawyers have been chasing documents and subpoenaing Twitter executives and employees for evidence of fraud in connection with it.
Musk likely wanted to remain flexible, so it might make more sense for him to stick with the $54.20 offer he had initially agreed to. In fact, in his first takeover offer letter, updated last Monday, Musk’s lawyers made it clear that the billionaire can still take whatever action he wants with Twitter. The $44 billion offer “does not waive or impair any of their rights, including their right to assert defenses and counterclaims in the lawsuit,” the letter said.
Meanwhile, Twitter wants Musk to drop the search for bot accounts, so that could become a point of negotiation when the two sides discuss a deal for a lower price of $50 a share. Twitter reportedly disputed Musk’s vague language about the debt financing. If Musk wants to buy Twitter at a discount of $50 per share, then whatever the bank of his choice and other financiers decide to do, Twitter wants him to get it done.
To get around the restrictions imposed by Twitter, and with court trials and testimony on the horizon, Musk decided to buy Twitter on all terms initially agreed to in the April merger contract, the people said.
The recent negotiations were briefly mentioned in a Delaware Chancery Court legal filing last Thursday. Musk asked for an immediate and unrestricted stay of the lawsuit and trial. His lawyers said the trial and case are now effectively “meaningless” with Musk’s renewed full-price offer, accusing Twitter of refusing to “accept an affirmative answer.” Musk’s lawyers say Musk could become Twitter owner by October 28, as long as Twitter stops stalling.
Twitter objected. Lawyers for the company said they did not believe Musk’s words at this time. They insist that if a bank commits more than $12 billion in financing for his purchase of Twitter, as he claims, the deal should be able to close by Monday, Oct. 10.
Ultimately, Judge Kathleen McCormick stopped the arguments. She sided with Musk and agreed to put the lawsuit on hold, but only until October 28. She said the next three weeks will be devoted to Musk and Twitter “closing the deal.” If they can’t reach a settlement, though, the trial will take place sometime in November.