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Twitter has approved a poison pill construction to complicate a takeover by Elon Musk. Saudi Prince Alwaleed bin Talal, a major shareholder of the social media company, said he thinks the Tesla CEO’s offer is too low.
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Musk, the owner of Tesla and SpaceX, launched a hostile takeover bid on Twitter on Thursday for $54.2 per share. Musk owns 9.1 percent of the company after recent purchases. Musk’s takeover bid values the company at $43 billion. Musk made it clear that it is his ‘best and last’ offer and that he does not want to raise the price any further.
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But Twitter thinks Musk’s offer is far too low and has been working on options since Thursday to decline it. The board of directors approved the so-called poison pill on Friday. This provides that existing shareholders will be given the right to buy new shares at a discount if a party undesirably acquires more than 15 percent of the shares. By issuing more shares, the cost of a squeeze-out for Musk increases and the interest of the unwanted guest dilutes. The friendly shareholders can also undertake not to sell their shares to Musk.
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