Elon Musk wants to renegotiate the Twitter deal at a lower price after months of wrangling over the takeover.
Sources familiar with the situation said the current proposal values the firm at around $31 billion.
This comes only weeks after Musk revealed that his bid to buy Twitter was reopened.
The sources stated that Twitter had declined the proposal.
However, in the last week, negotiations have narrowed to a 10 percent markdown, allowing Mr. Musk to pay around $39.6 billion for Twitter.
But those discussions have yet to move on.
Twitter’s market capitalization was $39.2 billion as of Wednesday, October 5.
The talks were held only weeks before a slated showdown in a Delaware courtroom to rule if Mr. Musk must proceed with his $44 billion takeover bid for Twitter.
He stated in July that he no more wants to acquire the social media firm, citing an unmanageable spam issue, prompting Twitter to sue him.
The bitter court battle disclosed Mr. Musk’s personal text chats with his circle of tech investors and celebrities, caught key Twitter executives, and seeded concern about the company’s future.
By striking a settlement, the two parties might avoid a difficult public trial that would most probably include testimony from top Twitter executives as well as Mr. Musk.
The billionaire’s deposition was planned for Thursday, September 29, but the parties decided to postpone it.
However, talks concerning a discount did not progress beyond the preliminary stage, and no term sheets were drafted.
It was unclear why the conversations had not progressed.
On Monday night, Mr. Musk addressed a letter to Twitter proposing to pay his full original purchase price for the firm.
The Tesla boss said the acquisition’s completion hinged on his ability to acquire funding from the banks that agreed to back his April offer, which offered $54.20 per share.
Mr. Musk will be compelled to pay a $1 billion termination fee if the banks fail to meet their financial promises.
He has also sought Twitter to pause its complaint against him.
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Twitter said: “The intention of the company is to close the transaction at $54.20 per share.”
The social media giant is now examining a number of ways to boost the deal’s certainty.
It involves court monitoring of the closing process to guarantee that Mr. Musk keeps his promise.
Sources said it will also propose that Mr. Musk pay an extra fee to compensate for the delays in the closure process.
Representatives from the billionaire and Twitter have been in contact since the letter was received.
They had not reached an agreement as of Wednesday afternoon.
Source: The New York Times