Voted unanimously by the board of directors, this “poison pill” will prevent the billionaire from easily increasing his stake.
The board of directors of Twitter wants to protect itself against any trickery on the part of Elon Musk. He unanimously adopted a plan to prevent the billionaire from accumulating the shares and thus significantly increase his stake in the company.
This “poison pill», a strategy used by companies that want to prevent an external takeover or a hostile takeover, must « «reduce the possibility of any entity, person or group gaining control of Twitter by accumulating stock in the market without paying all shareholders an appropriate premium or giving the board sufficient time to make decisions enlightened“, writes the board of directors in a press release.
According to this text, if an entity exceeds the threshold of 15% of participation without the agreement of the board, then the other shareholders will have the possibility of buying new shares at a reduced price. The objective is to dilute the share of the undesirable activist.
Musk evokes a “plan B”
This plan should allow the board of directors to save time and thus be able to study more calmly the takeover offer filed Thursday by Elon Musk. “It’s a defensive tactic that was predictable”, responded analyst Dan Ives of Wedbush. But it will not be perceived “in a positive way” by shareholders, he predicts, given the risk of “dilution”. And the plan will be “certainly challenged in court” because the board of directors has an obligation to act in the interest of the company and to increase its value for the shareholders.
Read alsoElon Musk attacks Twitter and offers to buy the social network for 43 billion dollars
The boss of Tesla and SpaceX has proposed to acquire Twitter for the equivalent of 43 billion dollars and thus take the company out of the stock market. On the same day, Elon Musk told the Ted2022 conference that he had “a plan Bif his takeover offer was rejected by Twitter. Then he tweeted that he would be “absolutely indefensible that [son] offer is not subject to a shareholder vote. They are the ones who own the company, not the board of directors.»
“Thanks for your support!”he also tweeted along with a poll by “Bitcoin Archive,” titled “Do you want Elon Musk to buy Twitter?”. Some 73% of the 19,494 voters answered “yes”. A follower of the format, he also asked his own question: “Making Twitter a private company at $54.20 should be a shareholder responsibility, not a board responsibility.” More than 83% of the 2.9 million votes went to “yes”.
The influence and pressure exerted by Elon Musk does not leave much room for Twitter executives, commented analysts at Wedbush Securities, who predicted a victory for the billionaire after many twists and turns. “The board doesn’t want Musk because they disagree on just about everything and his style doesn’t fit their corporate culture”underlined Dan Ives in an analysis published on the Daily Mail on Thursday. “The council will look for someone or a group to give them a better deal. But it will be difficult for other bidders to emerge.
SEE ALSO – Elon Musk offers to buy “100% of Twitter”