Twitter said Friday that it has adopted a “poison pill” plan that can prevent billionaire Elon Musk from significantly increasing its stake in social media companies. Countermeasures will take place the day after Tesla’s CEO Mask announces...
so statementTwitter said the new plan is to buy shares in the open market without paying a “proper management premium” or giving the board enough time to “make informed decisions”. , Group, or company said it would reduce the chances of managing Twitter. “
Mask disclosed earlier this month Filing On Thursday, we will buy all of the company’s outstanding common stock for $ 54.20 per share. Investors, however, were skeptical that the stock was actually below the previous day’s price and closed at $ 45.08 per share.Proposed by regulatory agencies on Twitter
One major investor has already opposed the offer. Prince Al Waleed Bin Talal of Saudi Arabia, who controls more than 4% of Twitter, said Thursday that he would “reject” the offer, according to Bloomberg News.
Musk said in an offer letter that he wanted to keep the company private, adding that his bid was “not a threat.” But if he can’t buy Twitter, he adds, “I need to rethink my position as a shareholder.”
What is a “poison pill”?
The so-called poison pill plan is designed to give companies subject to hostile takeovers more leverage in this situation. It was in the 1980s when a lawyer at an oil company targeted by corporate assailant T. Boone Pickens advised the company to flood the market with new stock and make it more difficult for Pickens to buy the controlling stock. Appeared in. according to To the Corporate Finance Institute.
For Twitter, this plan will take effect if an individual or group purchases at least 15% of Twitter’s shares on purchases that have not been approved by the Board of Directors.
If triggered by such a purchase, the plan would give other shareholders the right to buy additional shares of Twitter shares at a discounted price, which would dilute the value of Mask’s shares. It will effectively reduce the control that Mask can gain through stock purchases.
Twitter said the plan did not prohibit the board from accepting takeover offers if it believed it would be in the best interests of Twitter and its shareholders.