Posted on Apr 15, 2022
Twitter board adopts 'poison pill' after Musk's $43 billion bid to buy company
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https://www.cnbc.com/2022/04/15/twitter-board-adopts-poison-pill-after-musks-43-billion-offer-to-buy-company.html?utm_term=Autofeed&utm_medium=Social&utm_content=Intl&utm_source=Facebook&fbclid=IwAR0rM3qanFosTZ8ZOmhlDPxRjdgkxTt2NmtrKJYhR_8jtNc_RdB87mPAw8s#Echobox= [login to see]
Twitter board of directors unanimously voted to discount stock share price if someone buys more than 15% equity without permission
Twitter board of directors unanimously voted to discount stock share price if someone buys more than 15% equity without permission
Twitter board adopts 'poison pill' after Musk's $43 billion bid to buy company
Posted from cnbc.com
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Posted 2 y ago
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LTC Eugene Chu
..."Twitter adopted a limited duration shareholder rights plan, often called a "poison pill," a day after billionaire Elon Musk offered to buy the company for $43 billion, the company announced Friday.
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.
Such a move is a common way to fend off a potential hostile takeover by diluting the stake of the entity eying the takeover.
"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.
Twitter noted that the rights plan would not prevent the board from accepting an acquisition offer if the board deems it in the best interests of the company and its shareholders.
Musk already owns a more than 9% stake in Twitter as revealed in a Securities and Exchange Commission filing last week. Soon after his stake became public, Twitter's CEO announced plans for Musk to join the board. But days later, Musk reversed course and decided not to join the board after all.
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.
Also on Friday, Bloomberg reported, citing anonymous sources, that Twitter brought on JPMorgan to help respond to Musk's bid. Twitter had already been working with Goldman Sachs and Musk has been working with Morgan Stanley.
Several outlets including The New York Post reported Twitter was also fielding interest from Thoma Bravo, though it's still uncertain a bid will materialize, according to sources who spoke to Reuters.
JPMorgan has history with Musk, suing Tesla over a matter related to his 2018 tweet claiming he had "funding secured" to take the company private. Tesla later countersued the bank.
JPMorgan, Twitter and Thoma Bravo declined comment."...
..."Twitter adopted a limited duration shareholder rights plan, often called a "poison pill," a day after billionaire Elon Musk offered to buy the company for $43 billion, the company announced Friday.
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.
Such a move is a common way to fend off a potential hostile takeover by diluting the stake of the entity eying the takeover.
"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.
Twitter noted that the rights plan would not prevent the board from accepting an acquisition offer if the board deems it in the best interests of the company and its shareholders.
Musk already owns a more than 9% stake in Twitter as revealed in a Securities and Exchange Commission filing last week. Soon after his stake became public, Twitter's CEO announced plans for Musk to join the board. But days later, Musk reversed course and decided not to join the board after all.
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.
Also on Friday, Bloomberg reported, citing anonymous sources, that Twitter brought on JPMorgan to help respond to Musk's bid. Twitter had already been working with Goldman Sachs and Musk has been working with Morgan Stanley.
Several outlets including The New York Post reported Twitter was also fielding interest from Thoma Bravo, though it's still uncertain a bid will materialize, according to sources who spoke to Reuters.
JPMorgan has history with Musk, suing Tesla over a matter related to his 2018 tweet claiming he had "funding secured" to take the company private. Tesla later countersued the bank.
JPMorgan, Twitter and Thoma Bravo declined comment."...
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This will be fun to watch. Board members are fiduciaries. They can be personally sued by stockholders.
Having been a trustee and fiduciary on union pension plans during stress periods, I would suggest they lawyer up.
Having been a trustee and fiduciary on union pension plans during stress periods, I would suggest they lawyer up.
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