Twitter’s board of directors isn’t thrilled about Musk’s offer to take over the company so that he can “unlock” its potential, so they issued a “shareholder rights plan” in place until April next year. In the finance world, it’s otherwise known as a poison pill. It essentially prevents hostile takeovers by giving other company shareholders a right to buy more stock if an outsider comes along and tries to take control of a company. Musk was critical of the maneuver, saying that shareholders have the right to vote on it because they own the company, not the board of directors.
“The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. 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 company press statement said.
“Absolutely. It would be utterly indefensible not to put this offer to a shareholder vote. They own the company, not the board of directors,” tweeted Musk on April 15.