Twitter has adopted a “toxic pill,” a usual defensive tactic in the face of takeovers, that limits Elon Musk’s ability to increase his stake in the social media platform, just as a takeover firm has emerged to rival his $43 billion bid for Twitter.
On Friday, Twitter said it had adopted a “poison pill” plan that would reduce the stake of anyone raising more than 15 percent by selling more shares to other shareholders. Officially known as a shareholder’s equity plan, it will be in effect for 364 days.
And “Euro News” quoted informed sources that Thoma Bravo, the technology-focused private equity firm with assets under management of more than $103 billion as of the end of December, has told Twitter that it is exploring the possibility of making an offer.
However, the sources, who asked not to be identified, because the matter is confidential, stated that it is not clear the size of the offer that Thomas Bravo can make, and it is not certain whether such a competing offer will come to light.
A spokesperson for Thoma Bravo declined to comment while Twitter representatives did not immediately respond to a request for comment. The New York Post reported Thursday that Thomas Bravo is considering an offer to buy Twitter.
The move raises the specter of more private equity firms competing on Twitter.
What is the cause of fears of Mask?
According to Euronews, Musk’s criticism of Twitter’s reliance on ads for most of its revenue has made some private equity firms wary of cooperating with him.
Musk is the world’s richest man, with Forbes magazine estimating his net worth at $265 billion. However, he set a limit on the amount he was willing to pay. He told Twitter on Wednesday that his all-cash offer of $54.20 per share was the “best and last offer” and that he would reconsider his position as a Twitter contributor if it was rejected.
Musk owns more than 9 percent of Twitter, making him the largest shareholder following mutual fund giant Vanguard.
On Thursday, Musk said on Twitter that Twitter contributors should have a say in his offer, and published a poll in which most users agreed with him. Twitter’s board is still evaluating Musk’s proposal and will not put it to the company’s shareholders for a vote unless it approves it.
Shares of the company fell Thursday, indicating that most investors expect the board of directors to dismiss Musk’s offer as insufficient.