Twitter moves to block Elon Musk from increasing stake

Twitter has adopted a poison-pill takeover defence to make it difficult for Elon Musk to increase his ownership stake.

Twitter Inc. moved to prevent Elon Musk from significantly increasing his stake the day after he made a $43 billion unsolicited takeover bid for the social-media company.

The company on Friday adopted a so-called poison pill that makes it difficult for him to increase his stake beyond 15%. The billionaire founder of Tesla Inc. already owns a more than 9% stake that he revealed earlier this month.

The Wall Street Journal reported Thursday that Twitter was weighing such a move. Poison pills, also called shareholder-rights plans, are legal manoeuvres that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount. They are often used by companies that receive hostile takeover bids to buy themselves time to consider their options.

Twitter said in a statement that the rights plan doesn’t prevent the company from engaging with potential acquirers or accepting a takeover bid if the board determines it is in the best interest of shareholders.

Mr. Musk offered to buy Twitter for $54.20 a share in a bare-bones filing Thursday morning, saying it was his best and final offer and that he would reconsider his position as a shareholder if it was rejected.

He has been criticising how the platform is run, saying it needs to be transformed as a private company.

The Wall Street Journal