Twitter Inc. on April 15 adopted a limited-duration shareholder rights plan to protect itself from billionaire entrepreneur Elon Musk’s $43 billion cash takeover offer.
Mr. Musk made the bid on April 13 in a letter to the board of Twitter — the micro-blogging platform that has become a global means of communication for individuals and world leaders — and it was made public in a regulatory filing on April 14.
After his TED talk on April 14, Mr. Musk hinted at the possibility of a hostile bid in which he would bypass Twitter’s board and put the offer directly to its shareholders, tweeting: “It would be utterly indefensible not to put this offer to a shareholder vote.”
Under the plan, also known as a ‘poison pill’ strategy to resist a bid from a potential acquirer, the rights will become exercisable if anyone acquires ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the Board.
The rights plan will expire on April 14, 2023, Twitter said.
