The board of directors of the short message service has not yet finally rejected Elon Musk’s purchase offer.
(Photo: dpa)
san francisco Twitter’s board of directors decided to take defensive measures against a purchase of the company at a special meeting on Friday. The company announced that the new rules had been passed unanimously.
The Board of Directors has passed what is known as a “poison pill”. This is one measure companies can typically take to ward off a hostile takeover.
The poison pill kicks in when an individual or group acquires at least 15 percent of Twitter’s outstanding common stock without board approval. Then the other shareholders have the opportunity to purchase additional shares at a discount. That would make a takeover difficult. The rule should apply for one year.
The day before, Elon Musk had announced that he wanted to buy 100 percent of Twitter’s shares for around $43 billion and then take the company private. Musk has already bought a 9.2 percent stake in the past few weeks. Investors on the stock exchange do not believe that Musk will reach his goal: In New York trading, the share price fell by around 1.7 percent to the $ 45 mark at mid-day. However, the poison pill does not mean that the board of directors has finally rejected the takeover bid.
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The board explicitly reserved the right to continue to approve a sale of the company “if the board of directors believes that this is in the best interests of Twitter and its shareholders,” the Twitter statement said.
Elon Musk wants to buy Twitter
San Francisco-based founder Mostafa Akbari-Hochberg said Musk underbid at $54.2 per share. “The offer is undervalued by $10 a share,” Holobuilder’s CEO said. “At $65 a share or more, sentiment would be very different,” surmised Akbari Highmountain.
A prominent Twitter investor also called Musk’s offer too low. Saudi Arabia’s Prince Alwaleed bin Talal said the offer was not even close to the social media platform’s value.
>>Read also: Elon Musk’s billion-dollar offer for Twitter is met with skepticism by investors
At a conference Thursday, Musk said he wasn’t sure he’d “actually be able to acquire it.” He added that his intention is to “retain as many shareholders as the law allows” rather than remain the sole owner of the company himself.
“If the deal doesn’t go through because I don’t have confidence in management or believe I can drive the necessary change in the public market, I would have to reconsider my position as a shareholder,” Musk said.
More: Four Scenarios for Elon Musk’s Twitter Takeover.