PROVIDENCE, RI (AP) — Twitter said on Friday that its board of directors unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy and privatize the company.
Twitter said the move, officially dubbed a “limited-duration shareholder rights plan,” aims to allow its investors to “realize the full value of their investment” by reducing the likelihood that one person would take control of the company without paying a premium to shareholders or giving the board more time. Poison pills are often used to defend against hostile takeovers.
Twitter’s plan would go into effect when Musk’s stake grows from around 9% to 15% or more. Even then, Musk could still take over the company in a proxy fight by voting out the current directors. Twitter said the plan does not prevent the board from engaging with parties or accepting an acquisition proposal if it is in the company’s “best interests”.
Twitter revealed in a securities filing Thursday that Musk had offered to buy the company outright for more than $43 billion, saying the social media platform “needs to be turned private” to gain trust from its users build users.
“I believe that freedom of speech is a societal imperative for a functioning democracy,” Musk said in the filing. “It is now clear to me that the company will not thrive in its current form nor serve this societal imperative.”
Later Thursday, he went even further during a stage interview at the TED 2022 conference: “Having a public platform that is maximally trustworthy and inclusive is extremely important for the future of civilization.”
Musk revealed in regulatory filings over the past few weeks that he’d been buying Twitter stock on an almost daily basis since Jan. 31, ending up with about a 9% stake. Only the Vanguard Group controls more Twitter shares. A lawsuit filed in federal court in New York on Tuesday alleged that Musk illegally delayed disclosing his stake in the social media company in order to buy more shares at lower prices.
After Musk announced his stake, Twitter was quick to offer him a seat on the board on the condition that he would limit his purchases to no more than 14.9% of the company’s outstanding shares. But the company said five days later Musk declined.
https://www.huffpost.com/entry/twitter-poison-pill-elon-musk_n_6259a3b4e4b0723f8018c5d3 Twitter Adopts ‘Poison Pill’ Defense To Thwart Elon Musk Takeover