Twitter uses poison pill to fight back against Elon Musk’s offer


Twitter shares rose on Monday after the social media company launched a poison pill defense to thwart an unsolicited bid by Elon Musk to take the company private for $54.20 a share.

Monday’s securities filing confirmed the strategy Twitter outlined last week, which would allow the company to issue new shares that all shareholders except Musk could buy at a discounted price.

It imposed a “significant penalty” on any person or entity that would acquire more than 15 percent of the company without board approval, the filing said.

Mr. Musk currently owns just over 9 percent of Twitter stock.

“The board accepted the rights agreement to protect shareholders from coercive or otherwise unfair takeover tactics,” the filing reads.

Shares were up 3.8 percent to $46.78 as of 1:00 p.m. in New York.

According to a person familiar with the company, Twitter is using the poison pill defense to buy time to come up with a plan that would be in the best interests of its shareholders.

Stocks are gaining on speculation that Twitter will strike a deal more palatable to shareholders.

According to a person familiar with the matter, the company has registered takeover interests from other parties, including tech-focused private equity firm Thoma Bravo.

Private equity firm Silver Lake, which already owns a significant stake in Twitter, would also make sense as a partner given its existing relationship with Musk, but it’s unclear if they’re interested.

Meanwhile, Mr Musk could work with Oracle and a private equity consortium that includes Thoma Bravo to thwart Twitter’s poison pill, according to analysts at Bloomberg Intelligence, “while raising the offer by 10-15 percent to around 50.” billion dollars increased”.

Mr Musk has said any rejection of his offer, which values ​​Twitter at $43 billion, would cause him to re-evaluate his stake.

Over the weekend, he said the Twitter board’s economic interests are not aligned with shareholders.

Responding to a tweet about board members’ stock holdings, he said that with co-founder Jack Dorsey’s imminent departure, the board “collectively owns almost no stock.”

In a tweet Monday, Mr Musk, who is also Tesla’s chief executive officer, said if his Twitter bid is successful, board members would not receive salaries.

Tesla has paid its own directors an annual cash withholding of about $20,000 plus certain additional fees for the past few years, but they also receive stock option awards every few years, meaning they’ll make tens of millions of dollars or more from Tesla’s stock gains . Twitter uses poison pill to fight back against Elon Musk’s offer

Fry Electronics Team

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