After his plan to buy Twitter, the company’s board of directors adopted a “poison pill” which is a limited-term shareholder rights plan. Hoping to make it harder for Elon Musk to acquire the company.
The purpose of announcing The “poison pill” provision is to preserve the right of Twitter shareholders. So Musk’s stake will be diluted by acquiring more shares of the company at a relatively inexpensive price.
The company will trigger the provision if Musk or any other investor acquires more than 15% of the company’s shares.
This move comes as an attempt from Twitter’s board to wrest back some control in the deal after the unexpected offer of the billionaire. However, the poison pill won’t necessarily stop Musk’s bid in its tracks. But it could push him to the negotiating table.
“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,” Twitter said.
The only statement that Musk said after Twitter’s announcement was through a quote tweet from a Twitter poll. Asking: “Do you want Elon Musk to buy Twitter?”
Tesla CEO shared the poll and wrote “Thanks for the support!”. More than 19 thousand people voted. 73% of the respondent voted “Yes.”
According to Twitter, the poison pill plan will stay in effect for one year. Analysis expected more details will come in a filing with the Securities and Exchange Commission.