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Twitter adopts ‘poison pill’ to thwart Musk bid
STORY: Twitter on Friday adopted a limited-duration shareholder rights plan to protect itself from billionaire entrepreneur Elon Musk’s $43 billion cash takeover offer.Musk on Thursday hinted at the possibility of a hostile bid in which he would bypass Twitter’s board and put the offer directly to its shareholders.Under the plan, also known as a ‘poison pill’ strategy, the company could flood the market with new shares if anyone acquires 15% or more of Twitter’s stock without Board approval.On Thursday Musk took aim at Twitter saying the social media company needs to be taken private to grow and become a platform for free speech.And while Musk’s bid may take a page out of Warren Buffett’s take-it-or-leave-it playbook, investment bankers, investors and analysts say he needs a blowout bid and more details on his financing for this strategy to work.And, they said, Musk has a track record of reversing his positions — a trait that clouds his aim to buy Twitter.Wedbush Securities analyst Daniel Ives said Musk’s move would set in motion events that will likely see Twitter being sold one way or another.”If the board says ‘no,’ as a fiduciary, they’ll be eating lawsuits for breakfast. So, this is going to force the board to do a strategic process, look for another bid. But this, in my opinion, is the current Twitter story, with the clock striking midnight. One way or another, we believe the company is going to be sold.”On Friday – Thoma Bravo, a technology-focused private equity firm, informed Twitter that it is exploring the possibility of putting together a bid, people familiar with the matter said. Meanwhile, inside Twitter…a source told Reuters CEO Parag Agrawal sought to reassure employees during an all-hands meeting on Thursday that the company was not being “held hostage” by news of Elon Musk’s offer to buy the company.Still – it’s not clear how much cash Musk has available for a Twitter bid, and he provided no details about his financing in a regulatory filing on Thursday.And while news of his bid thrilled his fans on social media – his offer sparked concerns among Tesla investors and analysts that the electric carmaker could suffer as the chief executive becomes distracted by his takeover play and the possible sales of Tesla shares to fund the deal.Also- Tesla observers are worried about the prospect of Musk overseeing yet another company in addition to SpaceX, brain-chip startup Neuralink and tunneling venture the Boring Company.
