Twitter Adopts 'Poison Pill' to Thwart Musk Acquisition

Twitter has announced it is adopting a limited duration 'Poison Pill' in an attempt to thwart an acquisition by Tesla CEO Elon Musk.

A 'poison pill', also known as a Shareholders Rights Plan, allows existing shareholders to purchase additional shares at a discount, diluting the ownership of a prospective buyer.

The company announced the move in a press release today...


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Twitter, Inc. today announced that its Board of Directors has unanimously adopted a limited duration shareholder rights plan (the "Rights Plan"). The Board adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter.

The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. 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 Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.
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The 'poison pill' kicks in if Musk acquires more than 15% of the company without the board's approval.


Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.

Twitter says the Rights Plan will expire on April 14, 2023.

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