Twitter unveiled its counterattack against Elon Musk on Friday, using a strategy invented to repel corporate raiders in an attempt to block a takeover bid by the world’s richest person.
The strategy, known as a poison pill, would flood the market with new shares if Musk, or any other individual or group working together, bought 15 percent or more of Twitter’s shares.
That would immediately reduce Musk’s stake and make it significantly more difficult to buy up a sizable portion of the company.
Musk currently owns more than 9 percent of the company’s stock.
The goal is to force anyone trying to acquire the company to negotiate directly with the board. Investors rarely try to break through a poison pill threshold, according to securities experts — one said “it would be financially ruinous, even for him.”
Twitter said the mechanism would not stop the company from holding talks about a sale with any potential buyer and would give it more time to negotiate a deal that offers a sufficient premium.
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