An article reported by the New York Times claims that to counter Elon Musk’s hostile takeover of Twitter, the board will take a poison pill.
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“What’s happening?!” asks even Twitter’s own bio.
In the midst of Elon Musk’s effort to buy Twitter, a fast-paced Thursday—and preceding couple of weeks—could be said to be the same.
According to reports published Thursday by The New York Times and The Information, Twitter’s board of directors is unlikely to accept the offer.
Twitter did not respond to requests for comment.
According to The Information, a source familiar with the situation told them that Musk’s takeover effort had been rejected by the board.
Meanwhile, two people familiar with the matter told The New York Times that Twitter’s board is considering using a “poison pill” to prevent Musk from pressuring the company into selling.
According to the New York Times, the board of directors met on Thursday to discuss Elon Musk’s offer to buy the firm for $43 billion.
The poison pill strategy, also known as a shareholder rights plan, is used to avoid hostile takeovers by diluting an acquirer’s stake in the company by creating more shares in the market — or allowing current shareholders to buy more shares at a discount, resulting in a “pill” that makes a hostile takeover more financially painful to achieve.
The Wall Street Journal reported Thursday that Elon Musk became Twitter’s largest shareholder in early April, but Vanguard Group increased its share and is now the company’s largest stakeholder.
Musk stated that if he is unable to buy the company, he will consider selling his stake.
The offer was described as “unsolicited” and “non-binding” by Twitter on Thursday, although it indicated it would be considered.
According to the New York Times, Musk wrote to Twitter’s board chair Bret Taylor on Wednesday, saying, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe.”