London, Monday, 18 April 2022
Twitter announced on Friday that it is pursuing a poison pill approach to counter Tesla CEO Elon Musk's $43 billion proposal to take the firm private.
According to Reuters, the announcement came as private equity company Thoma Bravo expressed interest in launching a competing bid on Twitter.
The poison pill method allows existing shareholders to purchase additional shares of the business's stock at a discounted price, diluting Musk's current stake in the company. The goal of the plan is to prevent anyone from gaining more than a 15% share of the Twitter market.
If any shareholder meets or exceeds the 15% barrier, it will go into effect.
The idea does not necessarily put an end to Musk's bid, but it may make it more expensive. Musk announced his plan to buy Twitter for $54.20 per share, or $43 billion, on Thursday.
Musk, the founder of electric carmaker Tesla and space exploration company SpaceX, said on April 4 that he had purchased a 9.2 percent stake in Twitter, making him the social media platform's largest shareholder.
Musk stated that his offer is definitive and that if it is not accepted he will have to re-evaluate his stock ownership.
"Twitter has tremendous potential. I'll take care of it "he said in a Securities and Exchange Commission regulatory filing.
According to Forbes, Musk is the richest man on the planet, with a net worth of $265 billion.
(Written and edited by: The Decision Maker)