Twitter adopts ‘Poison Pill’ to ward off Elon Musk takeover
Twitter Inc. adopted a measure that would shield it from hostile acquisition bids, taking steps to thwart billionaire Elon Musk’s unwelcome offer to take the company private and attempt to make it a bastion of free speech.
The board set up a shareholder rights plan, exercisable if a party acquires 15% of the stock without prior approval, lasting for one year only. The plan seeks to ensure that anyone taking control of the social media company through open market accumulation pays all shareholders an appropriate control premium, according to a statement Friday.
Twitter enacted the plan to buy time, according to a person familiar with the matter. The board, which met Thursday to review the bid, wants to be able to analyze and negotiate any deal, and may still accept it.
The Tesla Inc. chief executive officer on Thursday offered $54.20 a share in cash for Twitter, valuing the company at $43 billion. Musk, who said it was his “best and final” offer, had already accrued a stake of more than 9% in Twitter since earlier this year.
In addition to Musk’s offer, Twitter has been fielding takeover interest from other parties, including technology-focused private equity firm Thoma Bravo, Bloomberg reported earlier Friday. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are advising Twitter.
A poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party. Poison pills are common among companies under fire from activist investors or in hostile takeover situations.
Under Twitter’s plan, each right will entitle its holder to purchase, at the then-current exercise price, additional shares of common stock having a then-current
Read more on tech.hindustantimes.com
