Twitter said the move, officially called a “limited-shareholder plan”, aims to allow its investors to “realize the full value of their investment” by reducing a person’s chances of gaining control of a company without paying commission to shareholders or giving more time to the table. Poison pills are often used to defend against hostile takeovers.
Twitter’s plan will take effect if Musk’s about nine percent increase to 15 percent or more. Even then, Musk could take over the company with a power of attorney contest by voting for the current directors. Twitter said the plan does not prevent the board from getting involved with parties or accepting a takeover bid if it is in the “best interest” of the company.
Twitter revealed in a caption on Thursday that Musk had offered to buy the company permanently for more than $ 43 billion, saying the social networking platform “must be turned into a private company” in order to build trust with its users.
“I believe that freedom of speech is a social imperative for a functioning democracy,” Musk said in a statement. “I now realize that the company will neither prosper nor serve this social imperative in its current form.”
Tesla CEO Elon Musk, right, interviews TED CEO Chris Anderson at the 2022 nonprofit meeting in Vancouver on Thursday. Musk suggested buying Twitter and keeping it private, prompting Twitter’s board to adopt a “poison pill” in response. (Stacie McChesney / TED)
Later on Thursday, during an on-stage interview at TED 2022 in Vancouver, he went even further: “Having a public platform that is as credible and broadly inclusive as is crucial to the future of civilization.”
Musk has revealed in regulatory deposits in recent weeks that he has been buying Twitter shares in almost daily batches since Jan. 31, ending with a share of about nine percent. Only Vanguard Group controls more Twitter notifications.
A lawsuit filed in federal court in New York on Tuesday alleges that Musk illegally delayed revealing his stake in the social media company so he could buy more shares at lower prices.
After Musk announced his stake, Twitter quickly offered him a seat on his board on the condition that he limit his purchases to no more than 14.9 percent of the company’s shares. But the company said five days later that Musk had refused.
The poison pill path is a “predictable” defensive maneuver, though it could be seen as a “sign of weakness” and treated unfavorably on Wall Street, Wedbush Securities analyst Daniel Ives said in an email.
