Poison Pill Strategy: Twitter Inc adopts ‘poison pill’ to thwart Elon Musk’s offer to buy the company
1 year ago
Two days after Elon Musk made a bid to buy 100% of Twitter Inc.’s stock in order to make the firm private and a strong platform of free expression, Twitter Inc.’s board has devised a new strategy called Poison Pill Strategy to ensure that no one gains control of the company through open market stock accumulation.
Twitter Inc. devised a ‘poison pill’ strategy on Friday to block billionaire entrepreneur Elon Musk’s $43 billion cash acquisition attempt.
The rights will become exercisable under the ‘poison pill’ method if someone acquires 15% or more of Twitter’s outstanding common shares in a transaction not approved by the Board. To shield itself against billionaire entrepreneur Elon Musk’s $43 billion cash acquisition offer, the microblogging tech company devised a limited-duration shareholder rights plan. According to Twitter, the rights plan will expire on April 14, 2023.
Musk made the offer in a letter to Twitter’s board of directors on April 13, and his $54.20 per share offer price was revealed in a regulatory filing. It’s a 38 percent premium over Twitter’s April 1 closing price. The last trading day before Musk’s over 9% ownership in the company made public was April 1.
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