Twitter Inc. The hostile acquisition adopted a move to protect it from bidding, while billionaire Elon Musk took steps to thwart the unwilling opportunity to take the company privately and turn it into a bastion of freedom of speech.
The Board has set up a shareholding scheme which, if a party buys 15% of the shares without prior approval, will only last for one year. According to a report on Friday, the plan seeks to ensure that anyone controlling Twitter through open market concentration pays the appropriate regulatory premium to all shareholders.
According to someone familiar with the matter, Twitter implemented the time-buying scheme. The committee wants to analyze and negotiate any agreement, yet it can be accepted.
“If the board believes in the interests of Twitter and its partners, the rights plan will not prevent the board from engaging with the parties or approving the acquisition plan,” the company said.
Tesla Inc. The CEO paid $ 54.20 a share in cash to Twitter on Thursday, valuing the social media company for $ 43 billion. Musk, who said it was his “best and last” offer, has already owned more than 9% of Twitter since the beginning of this year. Twitter’s team meets Thursday to determine if Musk’s proposal is for the benefit of the company and all its stakeholders.
A poison pill protection strategy allows existing shareholders the right to buy additional shares at a discount, which effectively reduces the hostile party’s ownership interest. Poison pills are common from companies with enthusiastic investors or in hostile acquisition situations.
Under Twitter’s plan, each owner will receive an additional share of the generic shares, at current and current fitness prices, twice the current market value.
Musk’s securities file, which reveals the auction on Thursday morning, contained a script from a letter he sent to the company. “It’s expensive and your partners will love it,” he said.
At least one key investor said the offer was too low and the market reaction seemed to agree. Prince Alwaleed bin Talal of Saudi Arabia said the deal “did not come close to the intrinsic value” of the popular social media site.
Speaking at a TED conference late Thursday, Musk said he was not sure if he could actually get it. He added that his purpose was to retain “as many shareholders as permitted by law” rather than having full ownership of the company.
Shares of Twitter fell 1.7% in New York on Thursday, reflecting the market view that the deal may be rejected or fall. The Wall Street Journal previously reported that the San Francisco-based company was considering protecting the poison pills.
Musk first released his Twitter shares on April 4, making him the largest personal investor. At the TED conference, he pointed out that he had a plan B if Twitter’s team turned down his offer. He declined to elaborate. But in his filing the previous day, he said he would reconsider his investment if the auction failed.
“If this deal does not work, I have no confidence in management or I do not believe I can drive the necessary change in the public market, I need to reconsider my position as a partner,” Musk said.
–With the help of Jillian Ward.
(This story was not edited by NDTV staff and was automatically created from a syndicated feed.)