Twitter Adopts “Poison Pill” Plan to Block or Delay Elon Musk’s Plan to Buy the Company

Twitter adopted a limited duration shareholder rights plan, often called a “poison pill,” essentially that would block or delay billionaire Elon Musk’s bid to buy the company for $43 billion. The board voted unanimously to adopt the plan.

Under the new structure, if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount.

The plan is set to expire on April 14, 2023.

“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 company said in a press release.

Musk already owns a more than 9% stake in Twitter as revealed in a Securities and Exchange Commission filing last week and soo after rit was announced Musk would be added to the Board of Directors of Twitter. Musk subsequently changed his mind and decided not to join the board.

If he had joined, Musk would not be allowed to accumulate more than 14.9% of beneficial ownership of the company’s outstanding common stock.

Much more to come on this story so stay tuned.