Twitter Approves ‘Poison Pill’ Plan To Prevent Musk Takeover

Twitter’s board of directors has adopted a “poison pill” plan to prevent a hostile takeover from Elon Musk. 

The poison pill has been disguised as a shareholder’s rights plan that will activate if or when any shareholder surpasses 15% ownership of the company’s stock. 

Fox News reported, Under the plan, which is also referred to as a “poison pill”, shareholders’ rights will become exercisable if an entity, person, or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board. In the event that the rights become exercisable, shareholders will be entitled to purchase additional shares of common stock at a discounted rate. 

Twitter says that the plan is intended to allow shareholders to realize the full potential of their stake and prevent any single entity from gaining control of Twitter through the open market. 

This plan however does not prevent the board from considering buyout offers and accepting Elon’s current offer for 100% of the company, though it is unlikely. 

The board originally offered Elon a seat but gave him the condition that while on the board, or 90 days after leaving the board he could not possess more than 14.9% of the company’s stock. Elon then refused the offer. 

Elon told Twitter that his $43 billion proposals were his “best and final” offer. Afterward, in an interview, the world’s richest man teased a plan B to be used if his offer was rejected but declined to explain the plan. 

His offer would pay $54.20 per stock which is currently valued at 45.08, meaning he would be paying roughly $10 more per stock than they’re actually worth.