Twitter uses a “poison pill” to block Elon Musk’s acquisition offer-Information Technology

Twitter used shareholder rights to prevent billionaire Elon Musk from increasing his stake and block his plan to buy Twitter outright for $43 billion.

Twitter has taken the move to use a “poison pill” – a defense against hostile takeovers of the company – to prevent Tesla CEO Elon Musk from raising his stake above 15%, thereby blocking Musk’s acquisition of Twitter.

Mr. Elon Musk became Twitter’s largest shareholder after buying back about 9.2% of this social network, but was later surpassed by another shareholder, Vanguard Group.

A “poison pill” – another name for a shareholder rights plan – is a measure to prevent a shareholder from increasing his shares above a certain limit, by allowing other shareholders to buy More stock at lower price. This measure is often used by businesses to defend against hostile takeover plans or to have more time to consider options.

Twitter’s statement said the plan does not prevent the company from entering into negotiations with other parties intending to acquire or accepting a takeover offer if the board considers it to be in the best interest of the company. shareholders.

In addition to Mr. Elon Musk, a number of other investment management companies such as Thoma Bravo LP are also rumored to be approaching Twitter with an acquisition offer.

It is likely that Twitter will reject the Tesla CEO’s offer on the grounds that the offered price ($43 billion, equivalent to a price of $54.20 per share) is too low, but leaves open the possibility of a high offer. than.

Mr. Elon Musk’s side also said that he would review his status as a Twitter shareholder if the offer was not accepted, and prepared a plan B.

A big question is where Mr. Musk will get the money to buy back Twitter. Despite holding the position of the richest person in the world at the moment, most of CEO Elon Musk’s fortune is tied to shares in Tesla.

Mr. Musk’s offer to buy Twitter also did not detail the financial aspect. However, experts and investors believe that many billionaires are still willing to contribute money with Mr. Elon Musk in this deal if it is appropriate.