Twitter Board Adopts ‘Poison Pill’ to Fend Off Musk Takeover Offer
Twitter’s board unanimously adopted a year-long shareholder rights plan, the company announced Friday, a day after Tesla CEO Elon Musk offered to buy the platform for $43 billion and take it private. Commonly referred to as a “poison pill,” a…
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shareholder rights plan is one board strategy for fending off a hostile takeover. 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,” the company said. The plan expires April 2023, and doesn’t prevent the board from accepting a transaction. It’s “intended to enable all shareholders to realize the full value of their investment in Twitter,” the company said. The rights would activate if an entity or person “acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board.” Each shareholder, other than the purchaser, would have the right to buy additional shares of common stock at a discounted rate. Former Twitter CEO Jack Dorsey tweeted Friday that “as a public company, twitter has always been ‘for sale.’ that's the real issue.”