Twitter is taking its first steps in response to Elon Musk’s bid to take over the company.
Twitter is adopting a plan called the “poison pill” that will protect the company from buying more Musk stock and give it time to look for alternatives. Twitter’s board approved the plan on Friday.
Also known as a shareholder rights plan, the action is to protect against an ownership bid that uses discounted stock prices to reduce ownership by hostile new shareholders. Several companies in the entertainment industry implemented these plans during the lease years, including cinema chain Cineplex, audio giant iHeartMedia and theme park company Six Flags Entertainment. However, poison pills are rare in the tech industry and especially among companies the size of Twitter.
The plan comes in response to Musk’s offer, which became known on Thursday. The “limited duration” plan expires in one year on April 14, 2023, and will take effect if the shareholder acquires more than 15% of the company in a transaction that has not been approved by the board.
“The rights plan does not preclude the board from engaging with the parties or accepting a takeover bid if the board considers it to be in the best interests of Twitter and its shareholders,” the statement said.
Muskie’s offer was the culmination of steps taken by the billionaire in recent months, who quietly bought more than 9% of Twitter’s stock and shared his thoughts on how Twitter should improve or change its product. Musk has become Twitter’s biggest outside shareholder.
After the takeover offer was announced, Musk appeared at a TED conference in Vancouver, where he explained his vision for the company.
“Twitter has become a kind of de facto town square, so it’s very important that people have a reality and a perception that they can speak freely within the law,” he said, adding that he wanted to do so. Open source algorithm. “This is not a way to make money, my strong intuition is that having as credible and inclusive a public platform as possible is extremely important for the future of civilization. I don’t care one bit about the economy.”
Late last week, Twitter announced that Musk would join the board and agreed to a “standby” deal that would limit its ability to acquire more than 14.9% of the company. On Saturday, Musk said on Twitter that he had changed his mind and would not join the board.
On Sunday night, Twitter CEO Parag Agrawal hinted to employees that Muskie would pursue a more aggressive strategy, telling them, “There will be distractions ahead, but our goals and priorities remain unchanged. “The decisions we make and how we implement them are in our hands and no one else’s.”
However, he added that the company will remain open to importing Musk. Agrawal cited the board members’ fiduciary responsibility as a possible reason why Musk decided not to join the board.
In a text message to Twitter chairman Brett Taylor, Musk suggested that if the company did not accept his offer, he would consider selling his stake.
“My offer is my best and last offer and if not accepted I have to reconsider my position as a shareholder,” he wrote.
In a TED talk on Thursday, Musk said, “I’m not sure I can afford it,” but mysteriously added that he had a “Plan B” if his offer was rejected.
If the Twitter board wants to get rid of Muskie interference, that might be the most attractive option, and poison pills might be the way to do it.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
