Twitter Inc. adopted a measure that will protect it from hostile takeover bids, taking steps to thwart an unsolicited proposal to take billionaire Elon Musk’s company private and make it a bastion of free speech.
The board established a shareholder rights scheme, which lasts only one year if a party acquires 15% of the stock without prior approval. The plan tries to make sure no one is taking control. Twitter According to a statement Friday, the open market pays a fair control premium to all shareholders through accumulation.
The chief executive officer of Tesla Inc on Thursday offered $54.20 per share in cash for Twitter, valuing the social media company at $43 billion. Musk, who said it was his “best and final” offer, had already acquired a more than 9% stake in Twitter earlier this year. Twitter’s board met on Thursday to review Musk’s proposal, to determine whether it is in the best interest. Company and all its shareholders.
A poison pill defense strategy gives existing shareholders the right to purchase additional shares at a discount, effectively reducing the ownership interest of the hostile party. Poison pills are common in companies that fire active investors or in hostile takeover situations.
‘love it’
Included in Musk’s securities disclosure bid Thursday morning was a script of the text he sent to the company. In it, he said, “It’s a high price and your shareholders will love it.”
However, at least one major investor said the offer was too low and the market reaction appears to agree. Saudi Arabia’s Prince Alwaleed bin Talal said the deal “doesn’t come close to the intrinsic value” of the popular social media platform.
Speaking at a TED conference later on Thursday, Musk said he wasn’t sure he’d be able to “actually achieve this.” He stated that he intended to retain “as many shareholders as is permitted by law” rather than retain. Sole Proprietorship of the Company itself.
Twitter shares fell 1.7% in New York on Thursday, reflecting the market’s outlook that the deal is likely to be rejected or collapsed. The Wall Street Journal previously reported that the San Francisco-based company was considering a poison pill avoidance.
Musk first disclosed his Twitter stake on April 4, making him the largest individual investor. At the TED conference, he indicated he has a Plan B in case Twitter’s board rejects his offer. He declined to elaborate. But in his filing earlier in the day, he said he would reconsider his investment if the bid failed.
Musk said, “If the deal doesn’t work, I don’t have confidence in management, nor do I believe I can make the changes needed in the public market, I’ll need to reconsider my position as a shareholder.” “
This story has been published without modification in text from a wire agency feed. Only the title has been changed.