Elon Musk and Twitter Row: Twitter and Tesla CEO Elon Musk are keeping no stones unturned on the latter’s acquiring of the microblogging site. The company has now announced a ‘poison pill‘ strategy to defend itself from Musk’s $43 billion hostile takeover bid. The move would allow Twitter Inc. to keep at bay Musk’s hostile bid to make the company private and promote “free speech” on the platform.
Twitter said the move, formally called a limited duration shareholder rights plan,” aims to enable its investors to realize the full value of their investment in the company by reducing the likelihood that any one person can gain control without paying shareholders a premium or giving the board more time.” Poison pills are often used to defend against a hostile 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,” Twitter said said.
In a move that sent shockwaves across the world, Elon Musk placed an unsolicited bid to buy Twitter Inc. for $43 billion, stating the promotion of freedom of speech on the microblogging site as a key reason for what he called his “best and final offer.” In a filing with the Securities and Exchange Commission (SEC) made public on the day, Musk offered $54.20 a share to stakeholders in order to buy the company and later spoke of a “plan B” if the offer does not go as planned.
The Twitter retaliating “rights plan” kicks in if a buyer takes 15 per cent or more of Twitter’s outstanding common stock in a transaction not approved by the board. Twitter didn’t disclose the details of its poison pill Friday, but said it would provide more information in a forthcoming filing with the Securities and Exchange Commission, which the company delayed because public markets were closed Friday.
However, while Musk had no immediate reaction to this move, the New York Post in a report quoting sources, the Tesla CEO speaking to investors who could partner with him in taking over Twitter. This could be announced within days, a the report said, as a source revealed that one of the possibilities were ” teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.”
Musk last week disclosed a purchase of 73.5 million shares or 9.2 per cent of Twitter’s common stock, an announcement that sent its shares soaring more than 25 per cent. He was offered a seat on the company’s board, which he declined, and instead placed a bid to buy the company on Thursday. However, some investors have already spoken against the proposal, including businessman and Saudi Prince Alwaleed bin Talal.
(With inputs from agencies)
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