Twitter board adopts poison pill after Musk’s $43 billion offer to buy company

Twitter board adopts poison pill after Musk’s  billion offer to buy company


Elon Musk’s Twitter profile displayed on a computer screen and Twitter logo displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on April 9, 2022.

Jakub Porzycki | Nurphoto | Getty Images

Twitter 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.

The plan is set to expire on April 14, 2023.

Such a move is a common way to fend off a potential hostile takeover by diluting the stake of the entity eying the takeover.

“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 said in a press release.

Twitter noted that the rights plan would not prevent the board from accepting an acquisition offer if the board deems it in the best interests of the company and its shareholders.

Musk already owns a more than 9% stake in Twitter as revealed in a Securities and Exchange Commission filing last week. Soon after his stake became public, Twitter’s CEO announced plans for Musk to join the board. But days later, Musk reversed course and decided not to join the board after all.

If he had joined, Musk would not be allowed to accumulate more than 14.9% of beneficial ownership of the company’s outstanding common stock.

In a live-streamed interview at the TED2022 conference in Vancouver on Thursday, Musk laid out his vision for making Twitter’s algorithms more publicly accessible and limiting content moderation.

He also acknowledged he’s “not sure” if he’ll actually be able to buy Twitter, though he said he does have “sufficient assets” to fund the deal if accepted. Despite his fortune, Musk has much of his assets tied up in equity in his companies including Tesla, meaning he’d likely have to liquidate or borrow against his assets to come up with a large sum.

But Musk said “there is” a Plan B if his initial offer, which he called his “best and final,” is rejected. He declined to provide further details in the TED interview.

Subscribe to CNBC on YouTube.

WATCH: Twitter, Goldman Sachs, and IBM are some of today’s stocks: Pro Market Movers April 14



Source

Anthropic CEO disputes Trump AI czar David Sacks’ claims that company is ‘woke’
Technology

Anthropic CEO disputes Trump AI czar David Sacks’ claims that company is ‘woke’

Dario Amodei, co-founder and CEO of artificial intelligence startup Anthropic. Chesnot | Getty Images Anthropic CEO Dario Amodei addressed “inaccurate claims” about the artificial intelligence startup’s policy stances on Tuesday after repeatedly facing criticism from David Sacks, the venture capitalist serving as President Donald Trump’s AI and crypto czar. Amodei said the company is aligned with […]

Read More
AWS recovers, Apple rallies, General Motors beats and more in Morning Squawk
Technology

AWS recovers, Apple rallies, General Motors beats and more in Morning Squawk

Attendees walk through an exposition hall at AWS re:Invent, a conference hosted by Amazon Web Services, in Las Vegas on Dec. 3, 2024. Noah Berger | Getty Images This is CNBC’s Morning Squawk newsletter. Subscribe here to receive future editions in your inbox. Here are five key things investors need to know to start the trading day: […]

Read More
China’s rare earth magnet exports to U.S. falls for second month, reversing brief recovery
Technology

China’s rare earth magnet exports to U.S. falls for second month, reversing brief recovery

Annealed neodymium iron boron magnets sit in a barrel prior to being crushed into powder at Neo Material Technologies Inc.’s Magnequench Tianjin Co. factory in Tianjin, China, on Friday, June 11, 2010. Bloomberg | Bloomberg | Getty Images China’s exports of rare earth magnets to the U.S. fell sharply in September, ending months of recovery […]

Read More