Twitter said Friday that its board of directors has unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company for more than $43 billion and take it private. The move would allow existing Twitter shareholders — except for Musk — to buy additional shares at a discount, thereby diluting Musk’s stake in the company and making it harder for him to corral a majority of shareholder votes in favor of the acquisition. Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more. The poison pill injects another twist into a melodrama surrounding the possibility of the world’s richest person taking over a social media platform he described Thursday as the world’s “de facto town square.” Twitter said its plan would reduce the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time to evaluate an offer. Such defenses, formally called shareholder rights plans, are used to prevent the hostile takeover of a corporation by making any acquisition prohibitively expensive for the bidder. Even if it discourages his takeover attempt, Musk could still take over the company by waging a “proxy fight” in which shareholders vote to retain or dismiss the company’s current directors. Twitter said its plan doesn’t prevent the board from negotiating or accepting an acquisition proposal if it’s in the company’s best interests. “They’re gearing up for a battle here with Musk,” said Daniel Ives, an analyst for Wedbush Securities. “They also have to give themselves time to try to find another potential buyer.” Musk has offered to buy the company outright for more than $43 billion, saying it “needs to be transformed as a private company” in order to build trust with its users and do better at serving what he calls the “societal imperative” of free speech. “Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said during an onstage interview at a TED event Thursday, just hours after his bid was announced. With about 82 million Twitter followers, Musk is both a prolific user of the platform and a vocal critic of the measures it has taken to restrict accounts that spread misinformation or amplify violent rhetoric and hate speech. He said Thursday he’s opposed to permanent user bans — the most famous of which is Twitter’s suspension of former President Donald Trump’s account after the Jan. 6 Capitol riot. Musk revealed in recent regulatory filings that he’d been buying Twitter shares in almost daily batches starting Jan. 31, ending up with a stake of about 9%. Only Vanguard Group controls more Twitter shares. A lawsuit filed Tuesday in New York federal court alleged that Musk illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices. After Musk announced his stake, Twitter quickly offered him a seat on its board on the condition that he would limit his purchases to no more than 14.9% of the company’s outstanding stock. But the company said five days later that Musk had declined. Ives said Twitter’s poison pill path is a predictable defensive maneuver but could be seen as a “sign of […]

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