Twitter's board of directors unanimously approved a shareholder rights plan on Friday. The company's goal was to prevent its takeover platformς by him Elon Musk, following the $43 billion offering.
The project will be valid for one year, and will be activated if Musk or anyone else acquire 15% of Twitter shares from a transaction that has not been approved by the company's board of directors.
This project is also referred to as a "poison pill." It is a plan for shareholders' rights and gives companies a way to discourage an aggressive takeover by another company or an activist investor. Once the investor has reached a certain percentage of ownership (in this case, 15%), the other shareholders can buy shares at a reduced price, thus reducing the activist buyer's share.
So in case Elon Musk or someone else acquires more than 15% of Twitter shares, the other interested parties will be able to buy additional shares at half price.
"The Rights Plan aims to enable all shareholders to realize the full value of their Twitter investment," Twitter said in a statement.
“The Bill of Rights will reduce the likelihood that any entity, face or group to acquire control of Twitter through the open market without paying all shareholders the appropriate premium control or without providing the Board of Directors with sufficient time to make informed judgments and to take actions provided by the interests of the shareholders”.
The plan will not prevent Twitter's board from accepting a takeover bid that it believes is in the interest of Twitter and its shareholders.
