Twitter share price gains as board plots defense strategy against Elon Musk
Twitter Inc. shares posted their biggest gain in two weeks on Monday after the social media company launched a poison pill defense to thwart an unsolicited bid by Elon Musk to take the company private at $54.20 a share.
A securities filing on Monday confirmed the defense strategy Twitter outlined last week, which would allow the company to issue new stock that all shareholders except Musk could buy at a discounted price. It imposes a “significant penalty” on any person or entity that would acquire more than 15% of the company without board approval, according to the filing. Musk currently owns just over 9% of Twitter shares.
“The board adopted the rights agreement to protect stockholders from coercive or otherwise unfair takeover tactics,” according to the filing.
The stock rose 7.5% to $48.45 in New York, its biggest jump since April 4.
Twitter is using the poison pill defense in order to buy time to come up with a plan that would be in the best interests of its shareholders, according to a person familiar with the company. The shares are gaining amid speculation that Twitter will strike a deal that is more palatable to shareholders.
The company has been fielding takeover interest from other parties, including technology-focused private equity firm Thoma Bravo LLC, according to a person familiar with the matter. Private equity firm Silver Lake, which already owns a significant stake in Twitter, also would make sense as a partner since it has an existing relationship with Musk as well, but it’s unclear if they’re interested. Meanwhile Musk may partner with Oracle Corp. and a private equity consortium that includes Thoma Bravo to thwart Twitter’s poison pill, according to Bloomberg Intelligence analysts, “while raising the
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