The board of directors at Twitter Inc. announced on Friday their adoption of a limited-duration shareholder rights plan, commonly known as a "poison pill," to prevent tech billionaire Elon Musk from taking over the company.
In a press release, the social media platform said it had adopted the plan "following an unsolicited, non-binding proposal to acquire Twitter."
The day prior, Musk, a frequent critic of the platform's censorship practices who happens to have a net worth of roughly $264 billion, offered to buy Twitter for $43 billion. Only recently, Musk had purchased 9.2% of the company's stock in an apparent effort to force his way onto the board and push changes to the way the company is run.
Musk was welcomed onto the board, however, with a caveat — he could own no more than 14.9% of the company. The Tesla founder decided to turn down the invite and put together an offer to buy the whole thing outright, suggesting he doesn't "have confidence in [Twitter’s current] management."
The bid was met with backlash from board members and caused liberals to suffer complete meltdowns. And so, Twitter has now responded by trying to fend off the takeover.
Under the poison pill plan, "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," CNBC reported.
The outlet noted that a poison pill strategy is a common maneuver in the event of a potential hostile takeover. It essentially aims to dilute the stake of the person or group seeking to take over a company, which in this case would be Musk.
The plan, set to expire on April 14, 2023, "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," Twitter noted in its press release.
It's the latest move in a rapidly unfolding controversy that has captured the attention of onlookers across the country.
Bloomberg reported this week that major players besides Musk and Twitter have also become involved. The platform reportedly brought on JPMorgan alongside Goldman Sachs to help respond to Musk’s bid. Meanwhile, Musk has been reportedly working with Morgan Stanley.
Musk has maintained that his efforts to purchase Twitter are not about money.
During a wide-ranging TED talk in Vancouver on Thursday, he described Twitter as "kind of the de facto town square" and said he believes that as such the platform is "very important for there to be an inclusive arena for free speech."
Editor's note: This article has been corrected to state that Elon Musk's offer to buy Twitter is $43 billion, not $43 million.