Twitter adopts 'poison pill' intended to thwart Musk takeover - The Washington P...
source link: https://www.washingtonpost.com/technology/2022/04/15/twitter-poison-pill/
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Twitter adopts ‘poison pill’ intended to thwart Elon Musk’s takeover bid
The plan signals that Twitter does not look favorably at Musk’s bid.
SAN FRANCISCO — Twitter is rebuffing Elon Musk’s hostile takeover bid, the company announced Friday, adopting a plan known as a “poison pill” that would seek to thwart the Tesla CEO from becoming the owner of the social media network.
The plan, known as a “shareholder rights plan” seeks to insulate shareholders against Musk’s efforts as the largest individual shareholder to amass an exponentially bigger stake in Twitter.
“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 news release.
Musk disclosed earlier this month that he had amassed a more than 9 percent stake in Twitter, and he launched a takeover bid to take the company private valued at roughly $43 billion Thursday.
The poison pill plan would effectively allow shareholders other than Musk to buy additional stock at a discounted price, flooding the market with shares that would then trade at a premium. That would make it difficult for a prospective owner to amass a higher stake without spending significantly more money.
Musk offered to buy Twitter at a cost of $54.20 per share.
The ”poison pill” would be triggered if Musk crossed a threshold of 15 percent ownership in Twitter.
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