Twitter: Twitter adopts ‘poison pill’ defense against Musk takeover bid
Musk’s proposal faces uncertainty on several fronts, including possible rejection and the challenge of raising the money, but could have far-reaching impacts on the social media service if consummated.
Twitter’s board has unanimously passed a so-called shareholder rights plan, also known as the “poison pill”, as the fight for control of the social media platform s intensified.
“The Rights Plan will reduce the likelihood that any entity, person or group will gain control of Twitter through open market accumulation without paying all shareholders an appropriate control premium,” Twitter said. in a press release.
Musk sent shockwaves through the tech world on Thursday with an unsolicited bid to buy the company, saying Twitter’s promotion of free speech was one of the main reasons for what he did. called his “best and last offer”.
The world’s richest person offered $54.20 a share, valuing the social media company at some $43 billion, in a filing with the Securities and Exchange Commission (SEC) made public Thursday.
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Musk told a conference in Canada he was “unsure” whether he would pull it off and acknowledged a “plan B” but declined to elaborate, although in the filing he did note that a refusal would make him consider selling his shares.
Musk last week announced a purchase of 73.5 million shares, or 9.2% of Twitter’s common stock, an announcement that sent his shares up more than 25%.
The board’s “rights plan” comes into effect if a buyer takes 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board.
Musk said he “could technically afford” the takeover without providing funding information, although he would likely need to borrow money or part with some of his mountain of money. Tesla or SpaceX shares.
Although he said he wanted to take the company private, he said the company would retain up to 2,000 investors, the maximum allowed.
Some investors have already spoken out against the proposal, including Saudi businessman and prince Alwaleed bin Talal.
Morningstar Research analysts echoed that outlook, saying, “While the board is considering the Tesla chief’s offer, we believe the likelihood that Twitter will accept it is likely less than 50%. ”
Twitter stock fell nearly 2% on Thursday.
Musk’s decision throws another bend in the roller coaster of his volatile relationship with the global social media service and raises many questions about what’s next.
He was offered a seat on the board, but turned it down over the weekend.
Musk is breaking the mold as a business figure, even in the Silicon Valley world known for disrupting markets and changing lifestyles.
The serial entrepreneur’s efforts include shifting to electric vehicles with Tesla, exploring private space and linking computers with brains.