Twitter Inc on Friday adopted a limited-duration shareholder rights plan to protect itself from billionaire entrepreneur Elon Musk’s $43 billion cash takeover offer.
Musk made the bid on Wednesday in a letter to the board of Twitter, the micro-blogging platform that has become a global means of communication for individuals and world leaders, and it was made public in a regulatory filing on Thursday.
After his TED talk on Thursday, Musk hinted at the possibility of a hostile bid in which he would bypass Twitter’s board and put the offer directly to its shareholders, tweeting: “It would be utterly indefensible not to put this offer to a shareholder vote.”
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Under the plan, also known as a ‘poison pill’ strategy to resist a bid from a potential acquirer, the rights will become exercisable if anyone acquires ownership of 15 percent or more of Twitter’s outstanding common stock in a transaction not approved by the Board.
The rights plan will expire on April 14, 2023, Twitter said.
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