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Twitter (TWTR) on Friday announced that its board of directors unanimously adopted a plan known as a poison pill to thwart Elon Musk’s $43 billion bid to acquire all outstanding shares of Twitter stock.
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Twitter said its board unanimously voted in favor of the “limited duration shareholder rights plan.” It follows Musk’s unsolicited offer to acquire Twitter for $54.20 a share, announced Thursday.
The “poison pill” kicks in if any person or group acquires at least 15% of Twitter stock. The announcement comes a little more than a week after Musk revealed his 9.2% stake in the company.
In addition to the 15% rule, other shareholders will be allowed to purchase additional shares at a discount. The idea is to insulate shareholders against Musk’s efforts as the largest individual shareholder to amass a significantly larger stake.
“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,” Twitter said in a news release.
On Thursday’s announcement, Twitter stock fell 1.7%, closing at 45.08 on the stock market today, and well below the offer price. On Friday, markets closed due to the holiday.
Musk spoke at the TED2022 conference in Vancouver on Thursday. There, he said he’s “not sure” if he actually can buy Twitter.
When asked if he had a “Plan B,” Musk said yes but did not elaborate.
“I invested in Twitter as I believe in its potential to be the platform for free speech,” Musk said in his SEC Twitter stock filing. “I believe free speech is a societal imperative for a functioning democracy.”
“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be a private company,” he went on to say.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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