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Twitter moved Friday to defend itself against Elon Musk’s $43 billion hostile takeover bid, announcing a “poison pill” plan that would make it harder for the billionaire to get a controlling stake.
Musk’s proposed buyout faces several hazards, including possible rejection and the challenge of assembling the money, but could have significant impacts on the key social media service if consummated.
Twitter said its board unanimously adopted a so-called shareholder rights plan, also known as a “poison pill,” which kicks in if an investor buys more than 15 per cent in shares without the directors’ agreement. Musk holds nine per cent.
The maneuver makes it harder for a buyer to build too big of a stake without board approval, by triggering an option that allows other investors to buy more of a company’s shares at a discount.
Twitter said the plan, which experts consider a potent tool against corporate raiders, does not prevent discussing or even agreeing to an acquisition.
Musk sent shockwaves through the tech world on Thursday with an unsolicited bid to buy the company, stating the promotion of freedom of speech on Twitter as a key motive for what he called his “best and final offer.”
The world’s richest person offered $54.20 a share, which values the social media firm at some $43 billion, in a filing with the Securities and Exchange Commission.
