Twitter Shareholders are not willing to accept Elon Musk’s offer.
Twitter has decided to adopt a “Poison Pill” approach to Elon Musk’s $43 billion offer to buy the company, CNBC reported on 16 April 2022. The limited duration shareholder rights plan provides that “if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount.”
In the official document containing the proposal for buying Twitter, the company said it was going to weigh the issue and see if it was in the best interest of shareholders. After the consultation, the team adopted the “Poison Pill” approach in a unanimous vote which will be in place until 14 April 2023.
Indirectly turning down Musk’s offer
Twitter hasn’t stated that it wasn’t interested in Musk’s offer. The adoption of this approach however suggests that it does not want to relinquish ownership of the company to him, or at least not without taking advantage of the situation to benefit its shareholders.
“The Rights Plan will reduce the likelihood that any entity, person, or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company wrote in a press release.
Musk recently acquired and currently holds over 9% of the stake at Twitter. The company offered him a place on the board of directors, but he rejected the offer. This was probably because he already had it in mind to buy the whole company, a move that has resulted in a lot of controversies.
He recently said that he was open to bringing partners on board should the need arise in the process of the acquisition. Twitter also maintains that it remains open to letting go of the company if the decision is in the company’s best interest.
Musk determined to acquire Twitter
As Twitter adopts a strategy that may hinder Musk from acquiring the company, the billionaire investor may have other plans concerning the outcome. Speaking at the TED2022 conference in Vancouver on Thursday, he said he has a backup plan as plan B, should Twitter turn down his $43 billion “final” offer. Although he did not provide further details on his backup plan, this demonstrates his determination towards acquiring the company against all odds.
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