Technology
Twitter Adopts 'Poison Pill' Defence To Counter Elon Musk's $43 Billion Hostile Takeover Bid
Elon Musk
Twitter on Friday (15 April) announced that its Board of Directors has unanimously adopted a limited duration shareholder rights plan, often called "Poison Pill" in corporate terms, after Tesla CEO Elon Musk offered to buy the company for $43 billion, reports CNBC.
The move will reportedly give existing Twitter shareholders - except for Musk - the ability to buy additional shares in the company at a discount, which in turn will dilute Musk’s stake in the company and make it harder for him to a get a majority of shareholder vote in favour of the acquisition.
Twitter’s plan would take effect if Musk’s stake in the company grows to 15 per cent or more.
The Rights Plan is part is set to expire on 14 April 2023.
Musk already owns a more than 9 per cent stake in Twitter as revealed in a US Securities and Exchange Commission filing last week.
"The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders," Twitter said in a press release.
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