Twitter adopts ‘poison pill’ to fight Elon Musk takeover

Under the “poison pill” strategy, the rights become exercisable when someone acquires ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board of directors.

Under the “poison pill” strategy, the rights become exercisable when someone acquires ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board of directors.

Twitter Inc. on April 15, passed a limited-term shareholder rights plan to protect itself from billionaire entrepreneur Elon Musk’s $43 billion cash takeover bid.

Mr. Musk made the offer on April 13 in a letter to the board of Twitter — the microblogging platform that has become a global communication tool for individuals and world leaders — and it was made public on April 14 in a regulatory filing.

After his TED talk on April 14, Mr. Musk hinted at the possibility of a hostile bid where he would bypass Twitter’s board and make the offer directly to shareholders, tweeting, “It would be completely indefensible to accept this offer.” not to a vote of the shareholders.”

Under the plan, also known as a “poison pill” strategy to resist an offer from a potential buyer, the rights will be exercised if one acquires ownership of 15% or more of Twitter’s outstanding common stock in a transaction that has not been approved by the board of directors.

The rights plan will expire on April 14, 2023, Twitter said.

www.thehindu.com

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