Twitter Adopts One-Year Poison Pill After Elon Musk’s Takeover Offer

Twitter said Friday that after Elon Musk’s unsolicited bid to buy a social media company, its board of directors unanimously approved a limited-term shareholder rights plan, also known as the poison pill.

The plan is a defensive strategy that increases and complicates hostile owners – or, according to Twitter, reduces “the chance for any entity, person, or group to seize control of Twitter by collecting an open market with or without paying a control premium.” corresponds to all shareholders. Allow sufficient time for the Board to make an informed decision and act in the best interests of shareholders.”

In a letter to Twitter’s board of directors, Tesla’s founder and CEO made what he calls the final bid to buy Twitter for $54.20, which he estimates is worth $43 billion. The council said it would consider the proposal.

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The new entitlement plan is valid for one year and expires on April 14, 2023. “This does not prevent the board from engaging with the parties or accepting a takeover offer if the board deems it in the best interest of Twitter and its shareholders. . The company registered.

Rights plans work by reducing ownership of a potential adversary by allowing existing shareholders to purchase additional shares of the company if any “organization, person, or group obtains 15% or more beneficial ownership on Twitter. Transaction in a transaction that has not been approved by the Board.”

Musk described his proposal as “important for the functioning of the United States as a free country and for freedom in the rest of the world.” He is an advocate of Twitter’s open source algorithms and an advocate of minimizing interference and content control.

US stock markets are closed today for Good Friday. Twitter shares closed the session low on Thursday (down 1.68% to $45.08), but gained nearly 3.5% in after-hours trading.

Source: Deadline

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