Twitter’s board of directors appears to be gearing up for a fight with Tesla CEO’s Elon Musk.
It unanimously adopted a “poison pill” defense on Friday, in response to Musk’s proposal to buy the company for more than $43 billion and take it private.
The move would allow existing Twitter shareholders — except for Musk — to buy additional shares at a discount, thereby diluting Musk’s stake in the company and making it harder for him to corral a majority of shareholder votes in favor of the acquisition.
Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more.
Twitter didn’t disclose the details of its poison pill Friday, but said it would provide more information in a forthcoming filing with the Securities and Exchange Commission.
Although they are supposed to help prevent an unsolicited takeover, poison pills also often open the door to further negotiations that can force a bidder to sweeten the deal. If a higher price makes sense to the board, a poison pill can simply be cast aside along with the acrimony it provoked, clearing the way for a sale to completed.
Adopting a poison pill also frequently results in lawsuits alleging that a corporate board and management team is using the tactic to keep their jobs against the best interests of shareholders. These complaints are sometimes filed by shareholders who think a takeover offer is fair and want to cash out at that price or by the bidder vying to make the purchase.
Musk has 82 million followers on Twitter. He had no immediate reaction to the company’s poison pill, but he indicated he’s ready to wage a legal battle.
“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” Musk tweeted. “The liability they would thereby assume would be titanic in scale.”
There is nothing to point to Musk being a positive impact on our country. No one with his record of mismanagement, harassment, employee abuse, and manipulation of stock and other financial implements. The man achieved citizenship through undue influence similar to that of Rupert Murdoch so frankly this country would be better off if Musk were shipped back to South America. I realize that he is a rich fascist, and there are different rules for the super wealthy, but frankly the man is a stain on our country.