Elon Musk said banks are working cooperatively to finance his $44 billion deal for Twitter Inc, and he asked a judge to halt the social media company's lawsuit against him just days before trial, according to a Thursday court filing.
The world's richest person said this week he would purchase Twitter at the price he agreed in April, $54.20 per share, but conditioned the deal on debt financing.
Banks are working cooperatively to fund the deal, which is expected to close on or around Oct. 28, the court filing said.
As a result, there is no need for an expedited trial to order defendants to do what they are already doing, and this action is now moot, said the filing.
Twitter didn't respond immediately to a request for comment.
A five-day trial is scheduled to begin on October 17 and Musk was supposed to be deposed on Thursday, although the parties mutually agreed to postpone his interview, sources told Reuters.
Musk said lawyers representing the debt financing parties have reassured him that they are prepared to honor their obligations. The filing said that the litigation would require a trial and appeals and could drag out payments to Twitter's shareholders by months.
Twitter won't take a yes for an answer. The filing said that they had insisted on proceeding with the litigation, recklessly putting the deal at risk and gambling with their stockholders interests.
Musk, who is also Chief Executive of Tesla Inc., asked for an immediate hearing, according to a letter sent to Chancellor Kathaleen McCormick of Delaware's Court of Chancery.
On the New York Stock Exchange, the shares of Twitter fell 3.7 per cent to $49.39 at the end of the day.
The talks have dragged on longer than anticipated since Musk made his offer on Monday, according to sources close to the litigation.
Dan Ives, Wedbush analyst, said it would be an understatement to say that talks between both sides are not going well. There is a lot of mistrust for obvious reasons, he said.
Major banks that committed to fund $12.5 billion, or about 28 per cent of the deal, could face hefty losses because of the rapid pace of interest rate hikes and dampened appetite for leveraged financing.
Randy Frederick, the managing director of trading and derivatives for the Schwab Center, said there was still some uncertainty about whether or not Elon can find the actual financing to do the deal.
Musk raised $15.4 billion by selling Tesla shares this year, and is leaning on large investors for a chunk of the financing, leading to speculation about whether he will sell more of the electric-vehicle maker's stock to fund the deal.
Financing will end up going through one way or another. Robert Gilliland, the managing director at Concenture Wealth Management, said it was just a point of negotiating terms at this stage.