5 Oct 2022

Twitter shares halted after report Elon Musk deal to go ahead

7:03 am on 5 October 2022
ISTANBUL, TURKIYE - JULY 9: In this photo illustration Tesla and SpaceX CEO Elon Musk's twitter profile is displayed on a mobile phone screen and the image of Elon Musk is displayed on a computer screen in Istanbul, Turkiye on July 9, 2022. Tesla CEO Elon Musk announced Friday that he is pulling out of his $44 billion deal to buy Twitter. Celal Gunes / Anadolu Agency (Photo by Celal Gunes / ANADOLU AGENCY / Anadolu Agency via AFP)

Elon Musk was due to face Twitter in court later this month after he tried to pull out of the takeover. Photo: AFP

Billionaire Elon Musk is proposing to go ahead with his original offer of $US54.20 ($NZ94) per share to take Twitter private, two sources familiar with the matter said, sending shares of the social media firm surging.

Twitter shares jumped 12.7 percent to $47.93 before trading was halted for the second time, while Tesla, the electric vehicle company that Musk heads, rose by 1.5 percent.

Bloomberg reported the move earlier, saying Musk made the proposal in a letter to Twitter. It cited people who asked not to be identified discussing confidential information.

Twitter and Musk's lawyers were not available for requests for comment from Reuters.

The news comes ahead of a highly anticipated face-off between Musk and Twitter in Delaware's Court of Chancery on 17 October, in which the social media company was set to seek an order directing Musk to close the deal at $54.20 per share.

"This is a clear sign that Musk recognised heading into Delaware Court, that the chances of winning versus the Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another," Wedbush analyst Dan Ives wrote in a note after the news.

Musk agreed in April to buy Twitter for $US44 billion, but within weeks said the number of bot accounts was much higher than Twitter's estimate of fewer than 5 percent of users.

Twitter denied the accusations and sued Musk to force the deal to go through.

The back-and-forth came amid a sharp downturn in the value of technology stocks, including Tesla, the electric car company that Musk leads and is the base of much of his wealth.

Twitter accused Musk of wanting out because he was worried about the price.

-Reuters / BBC

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