Twitter board adopts poison pill after Musk’s $43 billion bid to buy company
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This illustration was taken in Krakow (Poland) on April 9, 2022 and shows Elon Musk’s Twitter account on a screen. The logo on his phone screen is visible.
Jakub Porzycki | Nurphoto | Getty Images
TwitterThe company adopted a short-term shareholder rights program, sometimes called “poison pill” after Elon Musk made an offer to buy it for $43 billion. announced Friday.
The plan was unanimously adopted by the board.
If any group or individual acquires at least 15% of Twitter’s outstanding common stock in beneficial ownership without the approval of the board, then other shareholders may purchase additional shares at an affordable price.
It is scheduled to end on April 14, 2023.
A common tactic to prevent a hostile takeover is to dilute the stake in an entity that is interested.
The company stated in a press release that the Rights Plan would reduce the chance that an entity, person, or group takes control of Twitter via open market accumulation. It will not pay all shareholders an appropriate premium for control or give the Board enough time to make informed decisions and take action that is in the shareholders’ best interests.
Twitter pointed out that the rights agreement would not prohibit the board accepting an offer for acquisition if it deemed in the company’s best interest and the shareholders.
Musk owns an already existing a more than 9% stakeAccording to a Securities and Exchange Commission filing, Twitter’s CEO announced the acquisition in less than a week. Twitter’s CEO made the announcement shortly after his stake was publicized. plansMusk will join the board. But days later, Musk reversed courseUltimately, he decided to leave the board.
Musk wouldn’t be permitted to own more than 14.9% beneficial ownership of outstanding common stock if he joined.
Musk shared his vision of making Twitter’s algorithms accessible more widely and limiting the use of content moderation in a live streamed interview that he did at the TED2022 conference.
Also, Musk acknowledged that he wasn’t certain if Twitter would be purchased. However, he indicated that he had “sufficient resources” to pay for the purchase if accepted. Musk’s fortune aside, Musk still has large amounts of his wealth in equity held in several companies. TeslaThis would mean that he would have to either liquidate or borrow from his assets in order for him to get a significant amount.
Musk stated that there is a plan B in case his original offer to purchase the company and make it private was rejected. Musk declined further information in the TED interview.
Twitter’s current CEO Jack Dorsey said that Twitter is “for sale”.
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