Twitter Adopts Poison Pill Strategy to Block Elon Musk Takeover
Twitter's board unanimously approves a shareholder rights plan to prevent Elon Musk from acquiring a controlling stake without their approval. The defensive move follows Musk's unsolicited $43 billion buyout offer.
Twitter adopts a limited duration shareholder rights plan, commonly known as a "poison pill," to counter Elon Musk's unsolicited $43 billion buyout offer. The board unanimously votes in favor of this defensive strategy just one day after the billionaire publicly reveals his intention to purchase the social media company.
The plan triggers if any entity or individual acquires 15% or more of Twitter's outstanding common stock without board approval, allowing existing shareholders to buy additional shares at a steep discount. This mechanism effectively dilutes the ownership stake of the hostile party, making a takeover prohibitively expensive and ensuring the board has time to evaluate the best course of action.
Despite this defensive maneuver, Twitter clarifies that the poison pill does not prevent the board from accepting a legitimate acquisition offer if it benefits shareholders. Meanwhile, the company brings in JPMorgan alongside Goldman Sachs to evaluate the bid, while reports indicate that other potential buyers like Thoma Bravo are also showing interest in the platform.