Twitter board adopts poison-pill defense to block Elon Musk takeover

  

Category:  News & Politics

Via:  perrie-halpern  •  one month ago  •  22 comments

By:   David Ingram and Rob Wile

Twitter board adopts poison-pill defense to block Elon Musk takeover
Twitter moved Friday to block tech baron Elon Musk's proposed takeover of the social media company, adopting a strategy known as a "poison pill" that's often

S E E D E D   C O N T E N T



SAN FRANCISCO — Twitter moved Friday to block tech baron Elon Musk's proposed takeover of the social media company, adopting a strategy known as a "poison pill" that's often used to intercept hostile corporate bids.

The Twitter board of directors voted unanimously to adopt the strategy, which is formally known as a shareholder rights plan, the company said in a statement posted online.

The "pill" would be triggered if Musk attempts to buy at least 15 percent of Twitter shares on the open market; currently, the Tesla CEO owns about 9 percent of its stock.

Should the 15-percent threshold be crossed, Twitter's other shareholders — excluding Musk — would be granted the right to purchase additional shares at a discounted price, diluting the overall value of Twitter's stock.

Markets were closed Friday in observance of Good Friday. Twitter shares closed at $45.08 on Thursday

The social media company did not announce at what price shareholders would be able to make those additional stock purchases, but said more details would be forthcoming in a follow-up securities filing.

"The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter," the San Francisco-based company said in its Friday release.

Arun Kumaraswamy, a business and management professor at the Florida International University College of Business in Miami, said the effect of the poison pill is to make Musk's bid more expensive, since he would be locked into buying shares at the price he initially offered — $54.20 per share.

"The goal is to preclude him from being able to pay what he has offered to pay," Kumaraswamy said.

At the same time, Kumaraswamy added, Twitter is attempting to convince its other shareholders that Musk's offer of more than $40 billion is not in their interest, by indicating a higher price could be commanded by some other bidder.

Several news organizations including Bloomberg had reported Thursday that the Twitter board was considering the poison-pill defense. The strategy allows existing shareholders other than the person attempting the takeover to buy additional shares at a discount, diluting the equity of someone like Musk.

Musk on Thursday announced an offer to buy Twitter in a more than $40 billion deal that would take shares of the company's stock off public markets and give Musk complete control. He said Twitter's rules for online speech had become too burdensome, choking off some public debate that should be heard even if it's hate speech.

Twitter did not comment on the details of Musk's proposal, and the company kept open the possibility of reaching a deal for a possible takeover.

"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 company said.

Twitter's annual shareholder meeting is scheduled for May 25, an event that could provide another forum for Musk to air his grievances or seek to influence Twitter's direction.


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Vic Eldred
Professor Principal
1  Vic Eldred    one month ago

Why would NT put up a story that has already been contributed by one of it's members?

 
 
 
XXJefferson51
Senior Guide
1.1  XXJefferson51  replied to  Vic Eldred @1    one month ago

I now volunteer my name and my shares in Twitter to any class action lawsuit against Twitter over its fiduciary responsibility to the best interests of its shareholders.  The ETF and Mutual fund companies that don’t support the highest possible share value per share should be defendants in such a suit as well.  

 
 
 
XXJefferson51
Senior Guide
1.2  XXJefferson51  replied to  Vic Eldred @1    one month ago

Good question.  

 
 
 
pat wilson
Professor Guide
1.3  pat wilson  replied to  Vic Eldred @1    one month ago

Maybe 'cause your article is a mish-mash of news events, this one is specifically about Musk and Twitter. It's also more up to date.

 
 
 
Vic Eldred
Professor Principal
1.3.1  Vic Eldred  replied to  pat wilson @1.3    one month ago
According to Musk the future of civilization is dependent on Twitter

I think you're confused. I posted the same article the other day.

 
 
 
devangelical
Professor Principal
1.3.2  devangelical  replied to  Vic Eldred @1.3.1    one month ago

because this seed is getting/will get more traction due to the person that seeded it?

 
 
 
Vic Eldred
Professor Principal
1.3.3  Vic Eldred  replied to  devangelical @1.3.2    one month ago

No, thanks to me questioning it. I see little here related to the article.

 
 
 
Ender
Professor Principal
1.3.4  Ender  replied to  Vic Eldred @1.3.3    one month ago

Maybe because there is not much to say about it, really.

 
 
 
pat wilson
Professor Guide
1.3.5  pat wilson  replied to  Vic Eldred @1.3.1    one month ago

Yes, I didn't see your second article about Musk/Twitter. You have two up and are bitching because someone seeded a third ? [Deleted

 
 
 
Hallux
Sophomore Principal
1.4  Hallux  replied to  Vic Eldred @1    one month ago

Cuz Perrie's is a news story and yours was a diatribe?

 
 
 
XXJefferson51
Senior Guide
1.4.1  XXJefferson51  replied to  Hallux @1.4    one month ago

His wasn’t the only story on the issue presented here.  

 
 
 
Vic Eldred
Professor Principal
1.4.2  Vic Eldred  replied to  Hallux @1.4    one month ago

Wrong again. It was the same story.

 
 
 
devangelical
Professor Principal
1.4.3  devangelical  replied to  XXJefferson51 @1.4.1    one month ago

[deleted]

 
 
 
Perrie Halpern R.A.
Professor Principal
1.5  seeder  Perrie Halpern R.A.  replied to  Vic Eldred @1    one month ago

Vic I didn't see that you posted the same story. I'm sorry.

 
 
 
Vic Eldred
Professor Principal
1.5.1  Vic Eldred  replied to  Perrie Halpern R.A. @1.5    one month ago

No problem. You did much better with it. I'll try and remove mine.

 
 
 
pat wilson
Professor Guide
2  pat wilson    one month ago

According to Musk the future of civilization is dependent on Twitter. Absolutely absurd.

 
 
 
XXJefferson51
Senior Guide
2.1  XXJefferson51  replied to  pat wilson @2    one month ago

He’s largely right when it comes to quality of life and freedom. Breaking Twitter free front the content controlling gate keeper censors will be a great 1st step in breaking that whole evil system.  

 
 
 
Vic Eldred
Professor Principal
2.2  Vic Eldred  replied to  pat wilson @2    one month ago
According to Musk the future of civilization is dependent on Twitter.

LINK PLEASE

 
 
 
pat wilson
Professor Guide
2.2.1  pat wilson  replied to  Vic Eldred @2.2    one month ago

 
 
 
devangelical
Professor Principal
2.3  devangelical  replied to  pat wilson @2    one month ago

twitter is correct in eliminating unsubstantiated bullshit and russian botnet crap spread by the willfully ignorant right.

 
 
 
Moose Knuckle
Freshman Participates
3  Moose Knuckle    one month ago

The board of directors including Twitter's founder hold very little stock in the company. Their almost non-existent skin in the public companies financial success was exposed today. Shareholders are in shock that decisions are being made recklessly with no consequences to board members. The DOJ will be unable now to block a hostile takeover at this point.

Twitter is going to get a new owner and most likely become a private company despite the media's frivolous tantrums.

 
 
 
Ender
Professor Principal
3.1  Ender  replied to  Moose Knuckle @3    one month ago

I would have sold it for a couple of bil a while back

Yall deal with it now. I will be on my island.

 
 

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