Twitter announced on Friday that its board of directors has unanimously adopted a “poison pill” defense to prevent Elon Musk from acquiring the company.
If any business, person, or group acquires 15 percent or more of Twitter’s outstanding stock through a transaction not allowed by the board, according to the announcement, other stockholders will be able to purchase additional shares of stock at a discount price.
The plan expires on April 14, 2023. The company is expected to announce the details of the plan including the discount rate in a filing with the U.S. Securities and Exchange Commission.
The poison pill technique, also known as a shareholder rights plan, is used as a defense strategy by a target firm to prevent or discourage a potential hostile takeover.
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