The board of Twitter voted unanimously to enact a “poison bill” measure to retain control of the company.
QUICK FACTS:
- The board of social media platform Twitter has made changes to its stock policy in anticipation of a hostile takeover by billionaire Elon Musk.
- According to The Wall Street Journal, the company has adopted a so-called “poison pill” that would make it exceedingly difficult for Musk to increase his holdings in the company.
- CNBC reported that this change would allow other shareholders to purchase additional shares at a discount if one person or group acquires 15% of ownership through the purchase of stock.
- Twitter’s board voted unanimously to adopt the policy following Musk’s offer to buy the company outright for $43 billion.
THE IMPACT OF MUSK’S OFFER:
- A Friday report by Bloomberg cited anonymous sources who said that Twitter brought on JPMorgan to help respond to Musk’s offer.
- The group was reportedly already working with Goldman Sachs while Musk was working with Morgan Stanley.
- “The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company said in a press release.
BACKGROUND:
- As of the time that the board put their poison pill plan in place, Musk already owned more than a 9% stake in Twitter as revealed in a Securities and Exchange Commission filing last week
- Soon after the Tesla CEO’s massive buy became public, Twitter’s CEO announced plans for Musk to join the board. But days later, Musk announced he would not join the board after all.
