Twitter Uses Poison Pill To Protect From Elon Musk Hostile Takeover

Twitter Uses Poison Pill To Protect From Elon Musk Hostile Takeover - ebuddynews

The board of directors of Twitter adopted the decision to activate the poison pill mechanism to defend itself against Elon Musk to takeover, a bid worth 43,000 million dollars, and turning it private.

Twitter said the poison pill against Musk takeover is called a time-limited shareholder rights plan. It intends to allow its investors to realize the full value of their investment by reducing the likelihood that anyone could gain control of the company. Without paying shareholders a premium or giving the board more time, the company is without paying shareholders a premium.

Poison pill‘ is often used to defend against hostile takeovers. Twitter’s plan will take effect if Musk’s roughly 9% stake grows to 15%. Twitter said the plan does not prevent the board from engaging with the parties or accepting a takeover proposal if it is in the company’s best interest.

In a securities filing, Twitter had revealed that Musk had offered to buy the company for more than $43 billion. Musk says the social media platform needs to transform into a private company to build trust with its users.

Musk said at the presentation that he believes that freedom of expression is a social imperative for a functioning democracy. Musk now realizes that the company will not prosper or meet this social imperative in its current form.

Musk has been buying up blocks of Twitter shares since the end of January and now owns 9% of the company.

During an interview at the TED 2022 conference, he went even further that having a shared platform that is highly trusted and broadly inclusive is essential for the future of civilization.

Musk revealed in regulatory filings over the past few weeks that he had been buying Twitter shares in near-daily batches starting Jan. 31 and now has around 9%. Only the Vanguard Group controls more stock of Twitter.

A New York federal court lawsuit alleges that Musk illegally delayed disclosing his stake in Twitter. So he could buy more shares on Twitter at lower prices.

Twitter quickly offered him a seat on its board with a condition after Musk announced his involvement. The condition is that he limits his purchases to no more than 14.9% of its outstanding shares. But the company said after five days that Musk had refused.

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