On Thursday, Elon Musk provided a proposal to purchase Twitter. But, after 24 hours, the social media giant’s board of directors plans to make it harder for the Tesla CEO to acquire the company.
Musk proposed to acquire all the shares of the social media company that he does not own for $54.20 per share, valuing the company at $41.4 billion. The offer has led to Twitter’s board adopting a limited-term shareholder rights plan called a “poison pill” the company announced in a press release.
As a result, the method conserves the right of Twitter shareholders other than Musk to acquire more shares at a relatively low price, effectively diluting Musk’s stake.
“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,” the company said in its statement.
The Twitter board will trigger the provision if Musk (or any other investor) acquires more than 15% of the company’s shares. Musk currently owns around 9% of Twitter’s shares.
Eduardo Razo is the Assistant Content Editor for BNM, which includes writing daily news stories on the news media industry. He can be found on Twitter @eddierazo_ or you can reach him by email at eddie1991razo@gmail.com.
