BREAKING: Twitter on Friday said it adopted a 'poison pill' plan that could block billionaire Elon Musk from significantly increasing his stake in the social media company.
on Thursday to buy all of the company's outstanding common stock for $54.20 per share. But investors signaled they viewed the offer with skepticism, with the stock actually closing below its price from the prior day, at $45.08 per share.
One major investor has already come out against the offer. Saudi Arabia's Prince Alwaleed bin Talal, who controls more than 4% of Twitter according to Bloomberg News, said on Thursday that"I reject" the offer. In his offer letter, Musk said he wants to take the company private and that added that his bid"is not a threat." However, he added that if he is unable to purchase Twitter, he"would need to reconsider my position as a shareholder."A so-called poison pill plan is designed to give a company that's a target of a hostile acquisition more leverage in the situation. It emerged in the 1980s, when lawyers for an oil company targeted by corporate raider T.
If triggered by such a purchase, the plan would give other shareholders the right to buy additional shares of Twitter's stock at a discount, which would then dilute the value of Musk's shares. That would effectively reduce the control that Musk could gain through share purchases. Twitter said that the plan doesn't prohibit its board from accepting an acquisition proposal if it believes"it is in the best interests of Twitter and its shareholders."
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