witter adopts plan to prevent Elon Musk from easily buying back his shares
Steph Deschamps / April 16, 2022
Twitter, which is the subject of an unsolicited takeover bid by Elon Musk, announced Friday that it has adopted a plan to defend itself from the offensive, which is supposed to prevent the Tesla boss from easily buying back his shares.
The plan is to reduce the possibility of any entity, person or group taking control of Twitter by accumulating securities in the market without paying all shareholders an appropriate premium or giving the board of directors sufficient time to make informed decisions, the group said in a statement.
This clause, nicknamed poison pill in financial jargon, will be triggered if the hostile shareholder exceeds 15% of the company's shares without the approval of the board of directors.
Elon Musk owns just over 9% of Twitter at this point.
If he buys back enough shares to reach the 15%, all other holders of shares in the platform will be able to buy back shares at a reduced price, which would greatly increase the price that the entrepreneur would have to pay to get his hands on the social network.
Twitter's announcement shows that the San Francisco-based company intends to fight this attempt by the world's richest man to buy it out as a non-public company.
The whimsical billionaire shared a proposal to acquire the social network at a price that would value it at $43.4 billion, up from about $36 billion at present.
He said Thursday that he had sufficient funds, assured that he had a plan B if the GC refused his offer, and also that he was not looking to make money, during a live interview at the Ted2022 conference.
Very critical of Twitter's content moderation policy, he says he wants to make it the platform for free speech in the world, with fewer limits on what users can tweet.
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