Twitter adopts 'poison pill' to block Elon Musk takeover bid
John Raoux / John Raoux
Twitter is trying to stifle Elon Musk.
On Friday, the social media company unrolled a defense against Musk’s unwelcome takeover bid, introducing what is known as a poison pill to fend off Musk’s $43 billion acquisition attempt.
The maneuver, formally called a shareholder rights plan, essentially allows current shareholders to acquire more stock in the company at a discount, presenting Musk with a unwelcome “pill,” meaning his shares would become diluted and his purchase would become more expensive. It would require that Musk negotiate directly with Twitter’s board on any purchase attempt.
The poison pill will take effect once a person or entity acquires 15% or more of Twitter’s shares, according to an announcement from Twitter’s Board of Directors, which noted the plan will be in place until next April.
Musk holds about 9% of Twitter stock, but he has made an offer to buy the company outright.
With the poison pill plan now in place, Twitter is now preemptively defending itself against the possibility of Musk upping his stake in the company.
Twitter said the plan is aimed at enabling investors to “realize the full value of their investment” by making it less likely that Musk would still be interested in a hostile takeover.
Under the terms of the plan, Twitter can still engage with parties interested in buying the company, or even accepting an acquisition proposal, if a bid is in the “best interests” of the company and its shareholders.
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