(NewsNation) — Elon Musk’s $43 billion bid to buy Twitter has been dodged by the company. Twitter is now trying to flood the market with new stock, available to all stakeholders except Musk.
“The Rights Plan 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,” a news release said.
The “poison pill” defense, crafted by law firms in the 1980s, allows a takeover target to flood the market with new shares, or allows existing shareholders other than the bidder to buy them at a discount. Under this plan, anyone trying to acquire Twitter would have to negotiate directly with the board.
It’s a limited duration shareholder rights plan that would allow existing shareholders to buy Twitter stock at a discount in order to dilute the holdings of new investors
It would go into effect if Musk’s roughly 9% stake in Twitter grows to 15% or more.
Still, Musk presses on, acknowledging that he’s not sure if he’ll actually be able to buy Twitter. The billionaire has said he hopes to turn the platform into an inclusive arena for free speech.
“This $43 billion cash deal is the best deal for investors right now. It’s the only deal on the table. It’s all cash,” New York Post reporter Lydia Moynihan said on “Morning in America.”
She adds, “People are up in arms because the only duty of the board is fiduciary. That means they need to have the economic best interest of shareholders in mind. Essentially, they would have a fiduciary obligation to accept the better deal. And that’s what Musk is offering here.”
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” Musk said at a recent TED Talk,
Twitter co-founder Jack Dorsey on Friday denounced tweets claiming he was pushed out of the company because of Musk, saying he left on his own, and announced his resignation in November.
As the fight for the platform continues, experts say it is still possible for Musk to fight the poison pill measure in court, but no U.S. court has overturned a poison pill defense in the last 30 years.
