Twitter has adopted a shareholder equity plan to protect itself from billionaire Elon Musk’s $43 billion cash takeover offer.
Twitter took its first steps in response to Elon Musk’s attempt to take over the company.
According to Archyde.com, Twitter will follow a strategy called a “poison pill”, to protect the company and shareholders from Musk’s “vicious” attempts.
This strategy is well known in the large corporate world, also called a shareholder equity plan, and has been used by companies to prevent new acquisitions.
In the corporate world, this term is applied to a defensive strategy that protects the company from the takeover of billionaires and corporations, without the permission of the board of directors.
What happens is if any person or company buys 15 percent or more of the shares of a particular company, without management approval, the company is offering the shares at very low prices to the rest of the shareholders, until it removes the control of the new investor.
The Board of Directors approved this measure, which will continue to be implemented for a full year, to protect the company from a forced acquisition by Musk.
Twitter CEO Parag Agrawal had hinted that Musk would take “more aggressive” measures to acquire the company.
Musk had announced his desire to acquire Twitter completely, for $43 billion, and revealed plans to completely change the site to “serve humanity.”
