Following billionaire Elon Musk’s unwelcome offer to take the company private, Twitter Inc.’s board is considering adopting a measure that would safeguard the firm from hostile acquisition offers, according to individuals familiar with the situation.
Adopting a poison pill, often known as a shareholder rights plan, is one of the possibilities under consideration, according to the people, who requested not to be identified because they were discussing private discussions. The poison pill might be announced as soon as tomorrow on Twitter. According to one individual, another option under discussion is claiming that the offer is too low.
Tesla Inc. CEO Elon Musk bid $54.20 per share in cash for Twitter on Thursday, valuing the social media business at $43 billion. Musk has already amassed a stake in Twitter of more than 9% since earlier this year, and stated it was his “best and last offer.” The board of directors of Twitter convened on Thursday to examine Musk’s proposal to see if it was in the company’s and all of its shareholders’ best interests. The corporation will not comment on the offer or the strategy of the board of directors.
A poison pill defensive tactic allows current shareholders to buy additional shares at a reduced price, effectively diminishing the hostile party’s ownership stake. Poison pills are frequently used by corporations facing activist investors or hostile takeover situations.
A script of text Musk submitted to the firm was included in Musk’s securities filing reporting the bid. “It’s a high price, and your shareholders will love it,” he remarked.
However, at least one notable investor believes the offer is too low, and the market appears to agree. The transaction “doesn’t come close to the intrinsic worth of the popular social media platform,” according to Saudi Arabia’s Prince Alwaleed bin Talal.
Musk added later Thursday at a TED conference that he wasn’t sure he’d be able to “acquire it.” He went on to say that he wanted to keep “as many shareholders as the law allows,” rather than keeping sole ownership of the corporation.
In New York on Thursday, Twitter shares fell 1.7 percent, underscoring the market’s belief that the acquisition will be rejected or fall through. According to the Wall Street Journal, the San Francisco-based firm is mulling a poison pill defense.
