The future of Twitter is not yet fixed. One thing is certain, the social network’s board of directors takes a dim view of Elon Musk’s takeover bid, which wants to buy the company for 43 billion dollars. To fend off the Tesla CEO, Twitter is considering using some rather extreme legal mechanisms.
Unless you’ve spent the last two weeks in a cave, you haven’t missed Elon Musk’s surprise entry into the capital of Twitter. This April 4, 2022, the CEO of Tesla announced to become one of the main shareholders of the social network up to 9.2%, via an investment of 2.7 billion dollars.
In the wake of this announcement, Twitter executives confirm the arrival of Elon Musk to the board of directors. But that was without taking into account the strategy of dear Elon Musk. Finally, the CEO of SpaceX will not join the board of the blue bird. Better still, the boss of Tesla decides to put on the table 43 billion dollars on the table to buy Twitter via a hostile takeover.
“Having a public platform that everyone trusts and that is broadly inclusive is extremely important for the future of civilization. I don’t give a damn about economics,” assured Elon Musk during a TED conference shortly after the publication of his takeover offer.
Twitter has several legal weapons to repel Elon Musk
Unsurprisingly, the position of the Board of Twitter changes radically. He does not look favorably on this takeover bid by the billionaire. And if for the moment, the executive board of Twitter ensures that it is carefully studying Elon Musk’s takeover bid, means have already been put in place to reject the billionaire’s offer. According to our colleagues from the site The Verge, the board of directors of Twitter would consider using a legal mechanism developed in the 80s and called “Poison Pill” or poisoned pill in the language of Molière.
To put it simply, this technique consists in making the shares and the capital of a company less attractive and above all much more expensive for those who wish to acquire them. Via the “Poison Pill”, the management board of a company can decide to flood the stock market (as soon as an investor buys them massively) in order to facilitate their purchase for other investors. According to several specialists quoted by the media, Twitter has already provided for certain provisions relating to the “Poison Pill” in its statutes, in particular the possibility for the Board to issue “blank” preferred shares without prior approval.
It remains to be seen whether this tactic will be enough to dissuade Elon Musk from taking over Twitter. He recently explained why he is so keen on buying Twitter. According to him, his main objective is to make it a platform entirely dedicated to freedom of expression.
Source : The Verge