–
On Thursday, Tesla boss and the world’s richest person, Elon Musk, announced that he had placed a bid for all the shares on Twitter. The bid valued the company at 43 billion dollars, or 375 billion kroner.
The bid price was 54.2 dollars, but the stock market did not have faith, and on Thursday the price ended down 1.6 percent to 45.08 dollars.
Already on Thursday night, rumors were swirling that the Twitter board would use a so-called “poison pill” to prevent the hostile acquisition. In short, it is a strategy to make your own company less attractive to unwanted bidders, in this case Musk, which already owns 9.2 percent of the company.
On Friday afternoon Norwegian time, the confirmation comes from Twitter: A unanimous board has adopted a so-called “shareholder rights plan”, which is what is often described as a poison pill. The plan is activated if Musk – or another investor – crosses an ownership limit of 15 percent in a transaction that is not approved by the board.
The decision allows existing shareholders to buy new shares at a significant discount, which could dilute Musk and make it both difficult and expensive for him to buy up to a dominant position in the company. The right to purchase additional shares will apply until 14 April 2023, according to the press releases from Twitter.
–
“The rights plan will reduce the likelihood that a person or group will gain control of Twitter via the open market without paying all shareholders a sufficient premium, or without giving the board sufficient time to make informed decisions,” a statement from Twitter said.
Furthermore, Twitter writes that the plan is similar to other plans adopted by listed companies under “comparable conditions”.
Such a plan could force Musk to negotiate directly with the board. Bloomberg writes that the move is intended to give the Twitter board more time to evaluate the bid, according to unnamed sources. In the statement, the Twitter board itself writes the following:
“The rights plan does not prevent the board from having a dialogue with parties or accepting a takeover bid, if the board believes it is in the best interests of Twitter and its shareholders.”
Musk recently turned down an offer of a board seat on Twitter, after it became public knowledge that he had bought himself up to become the company’s largest shareholder. By accepting a board seat, Musk would not be able to buy up to an ownership share of more than 14.9 percent in accordance with the terms.
According to Bloomberg, funds managed by Vanguard Group have now become the largest owner in Twitter, while Musk is the second largest.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
–
