Elon Musk and Twitter Inc may reach an agreement on their litigation as soon as Wednesday and clear the way for the richest person to close his $44 billion deal for the social media platform, a source familiar with the litigation told Reuters.
Musk, who is also chief executive officer of Tesla Inc., proposed to Twitter late on Monday that he would change course and 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 source said that the potential agreement would likely remove that condition, as the discussions are confidential.
The legal team and lawyers for Musk updated the judge on Tuesday with their efforts to try to overcome mutual distrust and find a process for closing the deal.
Musk is scheduled to be deposed in Austin, Texas on Thursday.
Musk canceled a deposition in late September citing concerns about a Twitter attorney's exposure to someone who later tested positive for COVID - 19, according to a court filing made public on Wednesday.
The shares of Twitter were down 0.7 per cent at $51.63 on Wednesday afternoon. The stock was at its highest level since Musk and Twitter agreed in April that he would buy the company for $54.20 per share.
In July, Musk said he was walking away from the takeover agreement because he discovered that Twitter misled him about the amount of fake accounts.
The case involving Musk was based on allegations by Twitter whistleblower Peiter Mudge Zatko that became public in August.
The legal team of Twitter wanted to investigate if Quinn Emanuel lawyer Alex Spiro, who had 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 didn't respond immediately to a request for comment.
The court documents show that a former Exec at Twitter led teams directly involving Trust Safety Content Moderation, according to a May 6 email to Spiro from a former Exec at Twitter. The sender offered to communicate via alternative means. Zatko, who was the head of Twitter security until he was fired in January, has said he did not communicate with Musk or Musk's attorneys at Quinn Emanuel under oath.
In a Monday ruling, the judge, Kathaleen McCormick of Delaware's Court of Chancery, said it is at least plausible that Zatko sent the anonymous email. She ordered Spiro to file a statement with the court on Wednesday, saying his actions regarding the May 6 email, by 4: 30 p.m. EDT.