/GettyImages-1306472295-51d9a0682d0c41d7bd0686aa53d26e98.jpg "Twitter Adopts Shareholder Rights Plan 1")
Twitter, Inc. (TWTR) introduced, on April 15, 2022, a restricted length shareholder rights plan in response to the unsolicited acquisition bid from Elon Musk, CEO of Tesla, Inc. (TSLA). Usually known as a “poison tablet,” asserting such a plan is a typical tactic used to thwart a hostile takeover.
Twitter states that the rights plan “is meant to allow all shareholders to appreciate the complete worth of their funding in Twitter.” Particularly, it’s designed to “scale back the probability that any entity, particular person, or group features management of Twitter by way of open market accumulation with out paying all shareholders an acceptable management premium.”
Key Takeaways
- Twitter (TWTR) has adopted a shareholder rights plan, or “poison tablet,” to thwart the bid from Elon Musk to amass it.
- The rights expire on April 14, 2023, and permit present shareholders to buy extra shares.
- Additional particulars shall be launched by Twitter in an upcoming Kind 8-Ok submitting with the SEC.
Twitter’s Rights Plan
The rights will develop into exercisable if an entity, particular person, or group acquires useful possession of 15% or extra of Twitter’s excellent frequent inventory in a transaction not accepted by the board. Every proper will entitle its holder to buy, on the then-current train value, extra shares of frequent inventory having a then-current market worth of twice the train value of the precise.
A key proviso is that “the particular person, entity, or group triggering the rights plan” won’t be able to train these rights. The rights plan will expire one 12 months from now, on April 14, 2023.
Twitter states that the rights plan doesn’t forestall its board of administrators “from partaking with events or accepting an acquisition proposal” if the board believes that doing so is in the very best pursuits of the corporate and its shareholders.
Twitter signifies that extra particulars on the rights plan shall be disclosed in an upcoming Kind 8-Ok submitting with the U.S. Securities and Change Fee (SEC).