in ,

Twitter Board announces poison pill to prevent being bought out by Musk

Twitter board is going all out to prevent a takeover by billionaire Elon Musk. The Board has now announced a poison pill aimed at making it difficult for Musk to buy up the company.

Apparently, Musk has spent so much time on Twitter that he feels like owning it. The world’s richest man is ready to pay $43 billion for the social media network to become his own. However, as previously reported, the Twitter Board of Directors is not pleased with the idea. To block Musk, the Board has issued a new “shareholder rights plan.”

In a press statement, the Board said the measure was adopted “following an unsolicited, non-binding proposal to acquire Twitter.” The plan gives some shareholders the right to buy more stock in the event of a hostile takeover attempt.

This is the strongest sign yet that the Board will oppose Musk’s attempt to take over Twitter. The CEO had previously said the Board was considering Musk’s offer.

The Board explains the plan in detail in an SEC filing which has not been made public yet. The plan will be in force for a year.

The press release is reproduced in part below:

“The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.

“The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.

“The Rights Plan is similar to other plans adopted by publicly held companies in comparable circumstances. Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.”

The path to this point has been nothing short of dramatic. Shortly after it became known Musk had acquired 9.2 percent of Twitter, the Board offered him a seat on the Board. However, Musk declined the offer without giving any reason. Experts pointed to the law preventing seat holders from acquiring more than 15 percent of the company’s shares.

Musk’s offer to buy the company confirmed the speculations about why he would not sit on the Board.

Meanwhile, Musk had anticipated the move and criticized it by claiming it “would be utterly indefensible not to put this offer to a shareholder vote.” However, he has said he had a plan B if the Board did not accept his offer. While he did not detail the plan, Musk had revealed that he would have to consider his ownership of Twitter shares in his own SEC filing if his proposal was turned down.

Musk claims he is trying to preserve free speech on Twitter and not buying for any financial reason. During a TED conference, he said, “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important.”

Written by HackerVibes

MLB brings back YouTube Game of the Week on May 5th

Opera launches crypto-enabled browser for iOS