Twitter’s management armed itself against a possible hostile takeover of the company by billionaire Elon Musk, writes the BBC portal. To this end, the company has adopted a strategy known as the “poison pill”.
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On April 4, information appeared on the market that the president of Tesla took over 9.2 percent. Twitter shares, becoming the largest single shareholder in the company. The head of Tesla and SpaceX revealed in regulatory documents in recent weeks that he was buying shares in almost daily batches starting on January 31.
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This week, Musk offered around $ 43 billion ($ 54.20 per share) to buy Twitter. Musk called this price his best and final offer, although he did not provide any details on financing. The offer is non-binding.
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“From the moment I entered this investment, I realized that the company will neither prosper nor serve society in its current form. Twitter must be transformed into a private company,” Musk wrote in a letter to Twitter CEO Bret Taylor, quoted by Reuters.
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“This is my best and final offer and if it is not accepted I will have to reconsider my position as a shareholder,” Musk stated.
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Poison Pill Strategy
Twitter authorities want to block Musk’s takeover of the company. The board decided to adopt a plan to curb shareholders’ rights, a strategy known as the “poison pill”. This move is to prevent any shareholder from having more than 15 percent. shares in the company. The plan adopted for the year (will expire on April 14, 2023) aims to ensure that anyone who takes control of Twitter by purchasing shares on the open market, will pay all shareholders an appropriate control premium.
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Twitter’s board of directors detailed its defense plan to the US Securities and Exchange Commission (SEC) and issued a statement saying it was needed due to “Mr. Musk’s non-binding proposal to take over Twitter.”
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A hostile takeover is when one company tries to take over another against the will of its management.
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Josh White, a former SEC economist told the BBC that the “poison pill” is “one of the last lines of defense against a hostile takeover.” “We call it the nuclear option,” he said.
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White stressed that management made it clear that it “did not consider Musk’s offer high enough, and as the billionaire signaled he did not want to negotiate a higher price, Twitter’s management opted for the” poison pill “.
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White is surprised by Musk’s negotiating tactics. He pointed out that if his end goal was to take over the business, it might not be the right one. “I think if he were really serious about a takeover attempt, he would start with the right price and leave the window open for negotiation,” explained the economist.
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Musk criticizes Twitter
Musk is a regular Twitter user and has over 80.5 million followers. The billionaire has criticized the social media platform in recent weeks, largely because of the belief that it does not adhere to the principles of freedom of speech.
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As Reuters reminds, Twitter has angered Donald Trump supporters and other far-right politicians whose accounts have been suspended for violating content standards regarding violence, hate or harmful disinformation.
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Musk has described himself as “an absolutist of freedom of speech,” but is also known to block other Twitter users who question him or disagree with him.
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Elon Musk – the richest man in the world
According to the Bloomberg Billionaires Index, Elon Musk’s estimated fortune is $ 259 billion. He is by far the leader of the list of the richest people in the world. The Bloomberg Billionaires Index is a ranking of the richest people in the world. It is updated every day after the listing on the New York Stock Exchange is closed.
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Jeff Bezos is second with assets valued at $ 180 billion. Bernard Arnault is on the lowest step of the podium – 142 billion dollars.
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BBC, Bloomberg, TVN24 Biznes
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photo-source">Main photo source: Michael Vi / Shutterstock.com, Patrick Pleul / dpa central image POOL / PAP
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