Twitter Adopts 'Poison Pill' Defense Against Elon Musk Takeover
Summary from the AllSides News Team
Twitter’s board of directors launched its defense against Elon Musk’s hostile takeover attempt on Friday by unanimously adopting a limited duration shareholder rights plan, often called a “poison pill.”
The plan stipulates that if any individual or group acquires 15% of Twitter’s outstanding common stock without the board’s approval, others would be allowed to purchase new shares at a discount, thereby diluting the newcomer’s control of the company. “Poison pills” are a common tool for defending against hostile takeovers, and the Wall Street Journal (Center bias) reported Thursday that Twitter was considering the move.
Twitter is consulting with Goldman Sachs and JPMorgan Chase, according to reporting by Bloomberg (Lean Left). Musk, who now owns 9.2% of Twitter, has consulted with Morgan Stanley, which reportedly owns 8%. In a Wednesday letter, Musk appeared to signal that he would dump his Twitter stock if his takeover bid was unsuccessful. Private equity firm Thoma Bravo, which several outlets called a “buyout firm,” also approached Twitter with an acquisition offer, according to Reuters (Center bias).
Coverage was widespread and prominently featured across the spectrum on Friday, with most headlines highlighting the phrase “poison pill.” Coverage of the “poison pill” plan was mostly balanced, although coverage was divided when discussing related issues like Musk’s wealth and his intentions for online content moderation.
Featured Coverage of this Story
From the Center
Twitter board adopts ‘poison pill’ after Musk’s $43 billion bid to buy companyTwitter adopted a limited duration shareholder rights plan, often called a “poison pill,” a day after billionaire Elon Musk offered to buy the company for $43 billion, the company announced Friday.
The board voted unanimously to adopt the plan.
Under the new structure, 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.
From the Left
Twitter Learns From Romeo, Ditches Clingy Lover with Poison PillThe cute little Twitter bird has teeth. Today, the company announced it has poisoned the local watering hole, hoping it will stall Elon Musk as he seeks to swallow up the social media company in a hostile takeover.
The company board voted unanimously Friday to create a new “Rights Plan” that allows shareholders to buy additional shares at a discount should some party like, for instance, a relatively unknown internet troll named Elon Musk, decide to buy up 15% or more of the company shares. Musk currently owns around 9% of...
From the Right
What a 'poison pill' is and how Twitter’s board is using it against Elon MuskTwitter’s board unanimously voted to adopt a “poison pill” on Friday in an effort to prevent billionaire Elon Musk from taking over the company.
The poison pill is a strategy that can help block companies from being acquired in hostile takeovers. It allows the market to be flooded with new shares should an investor decide to buy up more than a preset percentage of a company’s stock.
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