Twitter’s board announced late Friday that it was activating a ‘poison pill’ defense to thwart Tesla CEO Elon Musk’s attempts to take over the company. The Company’s Board of Directors has unanimously adopted a limited-term “Shareholder Rights Plan” or ‘Rights Plan’ following an “unsolicited, non-binding offer to acquire Twitter”.
The rights plan would enable some shareholders to buy more shares of the company if Musk does attempt to acquire the company. Twitter’s board, via a press release, said the ‘rights plan’ would reduce the likelihood that an organization or an individual would be able to access the micro-blogging platform “through open market accumulation without paying a reasonable controlling premium to all shareholders”. or acquires control without providing the Board with sufficient time to make an informed decision.”
Twitter’s board said in the release, “Under the Rights Plan, rights may be exercised if an entity, individual or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a Board-approved transaction.” ”
This right scheme will be active for one year and it will end on April 14, 2023.
Notably, Twitter CEO Parag Agarwal told employees in a Q&A session on Thursday that the company’s board “will not be held hostage” by news of Musk’s plans to buy the company. He also said that Twitter’s board was evaluating Musk’s offer and would make a decision “in the best interest of our shareholders.”
Before the meeting, Musk had tweeted, “It would be completely unforgivable not to put this proposal to a shareholder vote. They own the company, not the board of directors,” on the prospect of Twitter’s board rejecting his proposal. In response to a question.
Musk has offered to buy Twitter for $54.20 per share in cash, totaling about $43 billion.
Twitter’s board takes poison pill to thwart Elon Musk takeover attempt, this post first appeared on BGR India.