Twitter said in a statement 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 companies without giving shareholders a bonus or more time on the board. Poison pills are often used to defend against hostile takeovers.
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.
A poison pill’s path is a “predictable” defensive maneuver, though it could be seen as a “sign of weakness” and viewed unfavorably on Wall Street, Wedbush Securities analyst Daniel Ives said in an emailed note.
https://abcnews.go.com/Business/wireStory/twitter-adopts-poison-pill-defense-musk-takeover-bid-84106116 Twitter takes on ‘poison pill’ defense in Musk’s takeover bid