Tesla CEO Elon Musk is making headlines around the world these days by offering to buy micro-blogging site Twitter. On Friday, Twitter has given an official statement on this.
Twitter’s board of directors has made a new plan to prevent Musk from buying Twitter. Twitter’s board of directors has adopted a limited-time shareholder rights plan called the Poison Pill that could make it harder for Elon Musk to take over the company.
This is being seen as a preparation to give a big blow to Elon Musk’s efforts. The Twitter board has said in an official press release that it has adopted this plan after an unsolicited and legally non-binding proposal to take over Twitter.
The poison pill is a kind of plan. The term has been adopted by the Twitter board to thwart Elon Musk’s attempts to buy Twitter. With this, buying Elon Musk’s Twitter will not be impossible, but it will definitely become very expensive.
This rights plan will come into force only when an individual, group, or entity tries to buy 15% of Twitter’s Outstanding Common Stocks. Allen currently holds 9% of the shares. The Twitter board said that “the rights plan will reduce the likelihood that any entity, individual or group seeks to take control of the company from the open market without paying a reasonable control premium to all shareholders.” According to the board, this plan will be applicable till 14 April 2023.
Elon Musk has offered to buy Twitter for $43 billion. Musk was previously offered a seat on the board at the social media company, which Musk declined. It was only after he declined the offer of a seat on the board that there were speculations that Musk was preparing to increase the stake. However, he surprised everyone by offering to buy the entire stake.
Elon Musk’s offer has also been turned down by Twitter’s shareholder and Saudi Arabia’s Prince Al Waleed bin Talal Al Saud. The Saudi prince wrote in a tweet, “I do not think that the price of one share of Twitter proposed by Elon Musk ($54.20) is even close to its intrinsic value given the company’s growth prospects.” Prince further writes, “As one of the largest and oldest shareholders of Twitter, Kingdom Holding Company and I decline this offer”.
