Twitter said on Friday that its board of directors has unanimously adopted a “poison pill” defence in response to Tesla CEO Elon Musk’s proposal to buy the company and take it private.
Twitter said the move, formally called a “limited duration shareholder rights plan”, aims to enable its investors to “realise the full value of their investment” by reducing the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time. Poison pills are often used to defend against hostile takeovers.
Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more. Even then, Musk could still take over the company with a proxy fight by voting out the current directors. Twitter said the plan doesn’t prevent the board from engaging with parties or accepting an acquisition proposal if it’s in the company’s “best interests”.
Twitter had revealed in a securities filing on Thursday that Musk offered to buy the company outright for more than $43 billion, saying the social media platform “needs to be transformed as a private company” in order to build trust with its users.
“I believe free speech is a societal imperative for a functioning democracy,” Musk said in the filing. “I now realise the company will neither thrive nor serve this societal imperative in its current form.”
Later on Thursday during an onstage interview at a TED conference, he went even broader: “Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation.”