Twitter’s board of directors, following receiving Elon Musk’s takeover offer, has invoked last resort.
On the 15th (local time), Twitter’s board of directors decided to implement a poison pill to defend management rights, CNBC and other foreign media reported.
The board of directors unanimously approved the introduction of poison pills today.
The poison pill is a system that allows companies that have been subjected to hostile mergers and acquisitions (M&A) to issue large-scale new shares or purchase additional shares at low prices to existing shareholders.
Twitter allows other shareholders to purchase additional shares at a discount if a specific individual or group acquires a 15% stake or more without board approval.
This poison pill is in effect until April 14, 2023.
■ Musk pressured “review the position of the director when the proposal is rejected”
Twitter’s board of directors said in a statement today that “This plan is to buy stock from the open market without any individual or group of people providing sufficient information to the board to make a judgment or giving time to take action to protect the interests of shareholders. It will deter any attempt to dominate Twitter.”
However, Twitter emphasized that the move was not intended to prevent takeover bids that it deems to maximize the interests of the company or its shareholders.
The move by Twitter’s board comes just a day following Musk publicly made a takeover bid.
Elon Musk offered to buy a 100% stake in Twitter the day before for $54.20 per share. The total size of the acquisition is 43 billion dollars (regarding 53 trillion won).
“I invested in Twitter because I believed it had the potential to become a platform for press freedom around the world,” he said in a letter to Twitter Chairman Brett Taylor. In particular, Musk argued that Twitter needed to be converted into a private company, saying it was difficult to guarantee press freedom in its current state.
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To this end, Musk announced that he plans to delist following acquiring a 100% stake in Twitter at $54.20 per share.
Musk, in particular, said, “This proposal is not only the best, it is final. If the proposal is not accepted, we may review our shareholder status once more,” he said.