Elon Musk reportedly proposes US$44 billion deal with Twitter

Two sources familiar with the matter said on Tuesday that Elon Musk was proposing to go ahead with his original offer of US $44 billion to take Twitter Inc private, a move that would end a bitter legal battle that was about to go to trial.

The agreement puts the world's richest person in charge of one of the most influential media platforms and ends months of turbulent litigation that damaged Twitter's brand and fed Musk's reputation for erratic behavior.

Musk, the chief executive of electric car maker Tesla, will take over a company he originally committed to buying in April, but soon soured on.

The price of Twitter went up 12.7 per cent to US $47.93 before the trading was stopped for the second time, while Tesla shares rose by about 1 per cent.

The move was reported earlier by Bloomberg, saying Musk wrote a letter to Twitter. It cited people who asked not to be identified talking about confidential information.

The lawyers of Twitter and Musk were not immediately available for comment from Reuters.

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

In April, Musk agreed to buy Twitter for US $44 billion or US $54.20 per share, but within a few weeks the number of bot accounts was much higher than Twitter's estimate of less than 5 per cent of users. One of the most prominent users of Twitter claimed in July that he could walk away from the deal because Twitter misled him about the number of real users and the security of user data.

This is a clear indication that Musk has recognized that the chances of winning vs. Twitter board were highly unlikely and this US $44 billion deal was going to be completed one way or another, Wedbush analyst Dan Ives wrote after the news.

The Twitter employees were caught in the middle of the meeting on Tuesday and expressed disbelief in their tweets.

Rumman Chowdhury, Twitter's director of machine learning ethics, transparency and accountability, said, "I am sitting on 2023 company wide strategy readouts and I guess we are going to collectively ignore what's going on."

Nick Caldwell, Twitter's general manager, joked that this time the upheaval did not take place on a day of rest, unlike in April when Musk's decision to back away from accepting a board seat coincided with a companywide day off.

The settlement will revive fears among Twitter users about Musk's plans to remove prominent politically conservative voices. Supporters of Donald Trump hope that Musk will reactivate the account of the former US president, who was banned from the US Capitol after the Jan 6, 2021 attack by his supporters.

The settlement gives Musk, one of the most prominent and outspoken entrepreneurs, a megaphone for his views. He has used Twitter to stir controversy, including on Monday when he proposed a peace plan for the Ukraine-Russia war that drew swift condemnation from Ukraine's president, Volodymyr Zelenskyy.

Text messages that came to light during the litigation showed that Musk wanted to shift Twitter away from advertising to subscriptions and to adopt services such as money transfers.