Musk offered to buy the San Francisco company at $54.20. Shares jumped nearly 13% to $47.95 before trading stopped.
Bloomberg News reported Tuesday that Musk made the proposal in a letter to Twitter, according to people familiar with the case who were not identified.
Musk has been trying to back out of the deal for several months after signing on to buy the social media platform in April. Shareholders have already approved the sale. Musk claimed that Twitter under-counted the number of fake accounts on its platform, and Twitter sued when Musk announced the deal was off.
Neither Twitter nor lawyers for Musk responded to messages seeking comment on Tuesday.
The trial seeking to compel Musk to buy Twitter is set to start in Delaware Chancery Court on Oct. 17.
Musk’s argument for walking away from the deal — has largely rested on the allegation that Twitter misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers. But most legal experts believed he faced an uphill battle in convincing Chancellor Kathaleen St. Jude McCormick, the court’s head judge, that something changed since the April merger agreement that justifies terminating the deal.