![]() ![]() ![]() In response to news that Twitter was considering a poison pill, Musk wrote Thursday, "If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty. Musk was briefly Twitter's largest shareholder with his 9.2 percent stake until Vanguard Group upped its ownership share to 10.3 percent.īloomberg noted Thursday that a "poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party." In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right. Twitter said this move "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." The new shareholder rights will be in effect for one year and will be triggered if any person, entity, or group acquires 15 percent of stock "in a transaction not approved by the Board." Twitter further explained: ![]() "The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders," the announcement said. In a press release, Twitter said its board unanimously "adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter." "The company on Friday adopted a so-called poison pill that makes it difficult for him to increase his stake beyond 15 percent," The Wall Street Journal wrote. ![]() Twitter's board of directors approved a poison pill to prevent a hostile takeover in response to Elon Musk's offer to buy the firm. ![]()
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