Twitter has announced a “poison pill” measure designed to prevent Tesla titan Elon Musk’s attempted takeover of the company after he launched a stunning $43bn (£33bn) bid to buy it.
The social media platform’s board put in place a one-year “Rights Plan” on Friday, the day after it received “an unsolicited, non-binding proposal to acquire Twitter” from the world’s richest person.
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The measure would give shareholders the opportunity to buy Twitter stock at a discounted price if Mr Musk increases his holdings to more than 15 per cent of the company, in a plan deliberately designed to water down his stake.
“The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter,” the board said in a statement,
“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.”
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Mr Musk offered the social media platform’s board $54.20 per share in cash to take total ownership of the company as he insisted he was the right leader to “unlock” its “extraordinary potential”.
The board says that the Rights Plan will stay in place until 14 April, 2023.
Mr Musk made his offer for Twitter in a letter to board chairman Bret Taylor.
“I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced,” he wrote.
Mr Musk, who has a personal wealth of around $260bn (£199bn), according to Bloomberg, says that Twitter must go private for the changes he views as necesary to be made.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” said Mr Musk in his letter.
“Twitter has extraordinary potential. I will unlock it.”
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