Twitter Adopts ‘poison Pill Plan To Shield Itself From Elon Musk Takeover

Twitter announced a plan to curtail shareholder rights, which could halt the management of billionaire entrepreneur Elon Musk.

Musk, CEO of Tesla's richest man in the world, has offered to buy the social media platform for $ 43.4 billion, saying he wants to unleash its "extraordinary potential" to promote freedom of expression and democracy around the world.

In response, Twitter's board of directors unanimously approved a plan on Friday that would allow existing shareholders to buy shares at a steep discount to reduce investment from new investors.

The method, known as the "poison pill" in the financial world, suggests that Twitter will fight Musk to prevent hostile power. It will take effect if a shareholder acquires more than 15% of the company's shares in a transaction not approved by the Board of Directors and which expires on April 14, 2023.

"The rights program does not prevent the board from communicating with the parties or from accepting a takeover offer if the board believes it serves the interests of Twitter's shareholders," the Twitter statement said.

Twitter's Response is the latest development in the billionaire saga on social networks, used by Musk himself. On April 4, Musk revealed that he had become Twitter's largest shareholder, quietly acquiring 9.2% of the company in recent months. He was later offered a seat on the board, but the move was canceled after Musk refused.

Employees of the social network have expressed concern about the appearance of Musk's subsidiary and are frustrated that the details of the purchase are not yet clear.

At a public meeting Thursday, CEO Parag Agraval assured employees that the company was not "hostage" to the bloc. Inviting employees to stay focused, he told them, "We as employees are in control of what happens," Reuters reported.

Few experts are willing to speculate on what will happen next, but a combative war may be on the horizon. Reuters reported Friday that buyer Thoma Bravo LP took to Twitter to express interest in Musk's offering.

Shortly after Musk announced he became Twitter's largest shareholder, Vanguard bought more shares, now surpassing it with 10.3% of the company. Jack Dorsey, founder and former CEO of Twitter, wrote on Friday that such sudden purchases always pose a risk to the company.

"As a public company, Twitter has always been sold out," he said. "This is the real problem."

Musk has already been sued for his Twitter acquisition, the investor is suing Tesla's CEO in a possible class action lawsuit for failing to disclose his share purchase by the deadline.

The lawsuit was filed as Musky faces a series of SEC investigations into his investment activities, including allegations of insider trading linked to his tweets.

Twitter adopts the "toxic pill" to thwart Musk's proposal