The board provided a major setback in the Tesla CEO’s plan to purchase control of Twitter
Twitter’s board of directors has issued what is frequently known as a “poison pill” maneuver to block Elon Musk’s buyout offer. This tactic blocks any such hostile takeover by stakeholders, providing a speedbump for Musk’s plan.
Following Musk’s public proposal to purchase the rights of Twitter for $43 billion, the social media platform’s board of directors has responded. The board is utilizing a new “shareholder rights plan” to fight off Musk’s bid seemingly.
The poison pill maneuver commonly enables certain shareholders the ability to purchase additional stock. This tactic often halts an outsider from seizing control of a company.
Earlier this week, Musk revealed a proposal to purchase Twitter and take it private. In a letter to the board, Musk offered to pay $54.20 a share in cash. The Tesla CEO believes his offer was a suitable and enticing bid. Though, he notes that if his bid is not accepted, he “would need to reconsider [his] position as a shareholder.”
Musk purchased 9.2 percent of the social network in March, according to an SEC filing he shared. This makes Musk the largest individual shareholder of the company. At the time, he was set to join Twitter’s board of directors before pulling out. In a public letter, Twitter CEO Parag Agarwal was unable to state why exactly Musk dropped out but did assure that it was “for the best.”
Over this entire ordeal, Musk has been outspoken about his plan in wanting to reevaluate the moderation of Twitter. Of course, that also came with other mentions that Twitter Blue subscribers should be verified and several other changes.
The situation between Twitter and Musk will undoubtedly continue in the coming weeks.
Via: Associated Press