TWITTER SAID TODAY that its board of directors unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company and take it private.
Twitter said the move, formally called a “time-limited shareholder rights plan,” is intended to allow its investors to “realize the full value of their investment” by reducing the likelihood that anyone could gain control of the company. company without paying shareholders a premium or giving the board more time.
Poison pills are often used to defend against hostile takeovers.
Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more. Even then, Musk could still take over the company with a power struggle by ousting the current directors.
Twitter said the plan does not prevent the board from engaging with the parties or accepting an acquisition proposal if it is in the “best interest” of the company.
Twitter had revealed in a securities filing yesterday that Musk had offered to buy the company for more than $43 billion, saying the social media platform “needs to transform into a private company” to build trust with its users.
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“I believe that freedom of expression is a social imperative for a functioning democracy,” Musk said at the presentation. “I now realize that the company will not prosper or meet this social imperative in its current form.”
Later Thursday, during an interview onstage at a TED conference, he went even further: “Having a public platform that is highly trusted and widely inclusive is extremely important for the future of civilization.”