By Tom Hals
WILMINGTON, Del. (Reuters) -Elon Musk and Twitter Inc have not yet reached an agreement to end the litigation and clear the way for the world’s richest person to close his $44 billion deal for the social media platform, two sources familiar with the litigation told Reuters on Wednesday.
Musk, the world’s richest person, proposed to Twitter late Monday he would change course and abide by his April agreement to buy the company for $54.20 per share if Twitter dropped its litigation against him.
Twitter’s legal team and lawyers for Musk updated the judge on Tuesday with their attempts to try to overcome mutual distrust and find a process for closing the deal.
“Keep an eye on the docket,” said one source.
Musk is scheduled to be deposed on Thursday in Austin, Texas.
“That’s the pressure point,” said a second source.
Musk canceled a deposition in late September citing concerns about a Twitter attorney’s possible exposure to someone who later tested positive for COVID-19, according to a court filing made public on Wednesday.
Shares of Twitter were down 2.5% at $50.72 in early trading. The stock hit its highest level on Tuesday since Musk and Twitter agreed in April that he would buy the company for $54.20 per share.
Musk, who is also chief executive of electric vehicle maker Tesla Inc, said in July he was walking away from the takeover agreement because he discovered Twitter had allegedly misled him about the amount of fake accounts, among other claims.
Part of Musk’s case was based on allegations by Twitter whistleblower Peiter “Mudge” Zatko that became public in August.
Twitter’s legal team has wanted to investigate if Quinn Emanuel lawyer Alex Spiro, who has 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.
Twitter uncovered an anonymous May 6 email to Spiro from “a former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation.” The sender offered to communicate “via alternate means.”
Zatko, who was head of Twitter security until he was fired in January, has said under oath he did not communicate with Musk or Musk’s attorneys at Quinn Emanuel.
The judge, Chancellor Kathaleen McCormick of Delaware’s Court of Chancery, said in a Monday ruling it is “at least plausible” Zatko sent the anonymous email. She ordered Spiro to file by 4:30 pm ET a statement with the court explaining his actions regarding the May 6 email.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Chizu Nomiyama and Nick Zieminski)