Twitter brings ‘poison pill’ plan to fight Elon Musk takeover
By Sanjay Maurya
Twitter has revealed a limited-duration shareholder rights plan that may hinder billionaire entrepreneur Elon Musk’s takeover attempt. Musk, the CEO of Tesla and the world’s richest man, had offered $43.4 billion to buy the social media network, claiming that he wants to unlock its ” extraordinary potential” to support free speech and democracy across the world.
In response, Twitter’s board of directors unanimously adopted a plan that would allow existing shareholders to acquire stock at a significant discount in order to dilute new investors’ holdings.
| Elon Musk (CEO of Tesla Motors) | Twitter (Social network company) |
| Born: 28 June 1971 (age 50 years), Pretoria, South Africa | Headquarters: San Francisco, California, United States Trending |
| Net worth: 27,360 crores USD (2022) Forbes | Founded: 21 March 2006, San Francisco, California, United States |
| Spouse: Talulah Riley (m. 2013–2016), Talulah Riley (m. 2010–2012), Justine Musk (m. 2000–2008) | CEO: Parag Agrawal (29 Nov 2021–) |
| Children: X Æ A-Xii, Nevada Alexander Musk, Xavier Musk, MORE | Founders: Jack Dorsey, Biz Stone, Evan Williams, Noah Glass |
| Parents: Errol Musk, Maye Musk | Subsidiaries: Twitter France SAS, MORE |
This move is known as the ‘poison pill’ in the finance world. In simple words, the poison pill is meant to prevent a hostile takeover by giving some shareholders the right to buy more stock if someone tries to seize control.
“The Rights Plan does not exclude the Board from negotiating with parties or approving an acquisition deal if the Board feels it is in Twitter’s and its shareholders’ best interests,” it added.“The purpose of the Rights Plan is to enable all shareholders to realize the full value of their investment in social media network Twitter.
The Rights Plan will reduce the likelihood that any entity, individual, 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,” an official press note stated.
Musk submitted an all-cash offer to buy a 100% stake in Twitter for $43 billion, or $54.20 per share. Musk said in a statement with the Securities and Exchange Commission that Twitter has “extraordinary potential,” and he wants to unlock it. “My offer is my best and final offer” and if it isn’t accepted, he’ll have to reconsider his position as a shareholder.
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