Xinhua News Agency, Beijing, April 16 (Xinhua) -- The US Twitter company announced on the 15th that all members of the board of directors voted unanimously to use the "poison pill plan" to counter Tesla CEO Elon Musk's acquisition of Twitter. Musk's competitors have emerged, and a private equity firm with more than $103 billion in assets under management is also considering acquiring Twitter, the sources revealed.
The "Poison Pill Plan", also known as the "Shareholders' Equity Plan" or the "Equity Dilution Anti-Takeover Measures", is a defensive measure taken by the board of directors of a listed company to prevent hostile takeovers and dilution of shares. According to the plan, if Musk buys more than 15% of Twitter stock, other shareholders will be able to buy additional new shares at a discounted price, making Musk's equity diluted and the acquisition more expensive.
On April 30, 2015, in Hawthorne, California, TESLA CEO Musk spoke at a product promotion conference. Photo by Xinhua News Agency reporter Yang Lei
This plan is valid for 364 days. Twitter said the plan does not affect the board of directors in negotiating or accepting acquisitions that are in the interests of the company and shareholders.
Musk currently holds about 9 percent of Twitter's shares and is the company's largest shareholder. According to regulatory documents, he has bought Twitter stock on almost every trading day since Jan. 31 this year.
Twitter's board previously announced the appointment of Musk as a director of the company, whose shareholding ratio must not exceed the 14.9% required by the company. However, Musk announced on the 9th that he would give up his Twitter board seat, triggering speculation that he would continue to increase his stake and even acquire the company.
Musk announced on the 14th that he plans to acquire all the shares of Twitter in cash. According to the documents submitted by Twitter to the U.S. Securities and Exchange Commission on the 13th, Musk made a takeover offer to acquire Twitter at a price of $54.20 per share, with a total price of about $43 billion. Musk said the offer is his highest offer and final offer.
Pedestrians walk past the gate of the New York Stock Exchange with huge "Twitter" posters hanging on November 7, 2013. Photo by Xinhua News Agency reporter Wang Lei
According to Forbes, Musk is worth more than $260 billion and is currently the world's richest man. He is a Twitter deep user who has sent out more than 17,000 Tweets and has more than 80 million followers.
Daniel Ives, an analyst at Wade Bush Securities, told The Associated Press that Twitter's "poison pill plan" was not surprising, and that "they are ready to fight Musk and win time for other potential buyers."
John Coffey, a law professor at Columbia University, said Musk could theoretically challenge the "poison pill program" with legal means, but "no court has won a similar lawsuit in the past 30 years"; incitement to Twitter shareholders to fire squid on the board is more feasible, but it is also bad for Musk.
Musk's competitors are also emerging. Multiple sources, speaking on condition of anonymity, told Reuters that Thomas Bravo, a U.S. private equity firm that invests mainly in technology, has reached out to Twitter to express interest in making an acquisition offer. However, it is unclear whether the company's bid will be fulfilled or not.
The New York Post first reported on the 14th that Thoma Bravo intends to bid with Musk for Twitter. Neither the company nor Twitter responded.
Industry insiders say it is also possible for private equity firms to partner with Musk to buy Twitter. Silver Lake Partnership, which has more than $90 billion in assets under management, is one of Musk's potential collaborators. The company's co-CEO, Egon Durban, is a member of Twitter's board. (Wang Hongbin)