Twitter has no intention of being bought by Elon Musk at all. The board of directors of the social network has thus drawn a “poison pill” to curb the desire for acquisition of the billionaire. Will this be enough?
Twitter’s board of directors intends to fight to the end to prevent Elon Musk from swallowing up the social network wholeheartedly. The boss of Tesla, who recently became Twitter’s largest shareholder with just over 9% of the company’s capital, initially refused a seat on the boardas it limited the possibilities of acquiring as many titles as he desired.
Limit the power of Elon Musk at all costs
Then the richest man in the world has shown his trump card : an unsolicited takeover bid that will cost it $41 billion. But even if this takeover generously values Twitter, whose market capitalization is around 36 billion, several shareholders opposed the operation. And the board of directors has no desire to leave the reins of the company to Elon Musk.
This is why the management of the social network drew what is called in financial jargon a “poison pill” because of “ the unsolicited and non-binding proposal to acquire Twitter “. This manoeuvre, also known as a “time-limited shareholder rights regime”, is intended to block hostile equity participation by giving certain shareholders the right to buy more stock if an outside shareholder tries to take over. control of society.
More specifically, if Elon Musk reaches 14.9% of the capital of Twitter, the other shareholders will be able to acquire shares at a reduced price. This is to “dilute” the billionaire’s stake in the capital of the company, while giving other shareholders the ability to buy more shares. All while raising the price of titles for Elon Musk…
This “poison pill” will therefore make Twitter much more expensive for the businessman. Can he afford to continue his assault? Answer in the next few days.
