(San Francisco) Twitter, the subject of a hostile takeover bid by Elon Musk, isn’t backing down: The network took action on Friday allegedly to prevent the Tesla boss — and richest man in the world — from becoming too light on his Redeem Shares.
Updated April 15th
This is the so-called “poison pill clause” in financial jargon: The Californian company plans to sell its shares for all other shareholders.
It is triggered when Elon Musk exceeds 15% of Twitter shares without Board of Directors (CA) approval. Elon Musk already owns just over 9% of the company’s capital.
If he buys back enough shares to hit the 15%, all other stock holders on the platform can buy them back at a discounted price, which would greatly increase the price the entrepreneur would have to pay to get his hands on it the social network.
The plan must “reduce the possibility that a company, person or group will take control of Twitter by accumulating securities in the market without paying all shareholders a reasonable premium or allowing the board of directors adequate time to make informed decisions.” to meet,” said San Francisco-based Das, the company said in a statement.
Twitter therefore wants to fight this attempt by Elon Musk to buy it back to make it an unlisted company.
“It’s a predictable defensive tactic,” said Wedbush analyst Dan Ives. But it won’t be perceived “positively” by shareholders, he predicts, given the risk of “dilution.”
And the plan will “certainly be challenged in court” because the board is committed to acting in the interests of the company and increasing its value for shareholders.
Elon Musk on Wednesday put forward a proposal to acquire the social network at a price that would value it at $43.4 billion, up from around $36 billion currently.
He said Thursday he had “adequate funds,” assured he had a plan B if the board rejected his offer, and that he didn’t want to “make any money,” during a live interview at the Ted2022 conference.
He did not give any specific information about the financing, but he would definitely have to borrow or sell part of his shares in Tesla or SpaceX, his space company.
Very active on Twitter, where he has almost 82 million subscribers, but also very critical of the network’s content moderation policy, he claims to want to make it “the platform for freedom of expression in the world” with fewer restrictions on what users can do tweet.
After repurchasing 73.5 million shares of the company’s common stock early last week, he was offered a seat on the board, but ultimately turned it down on Sunday after receiving a spate of platform-change proposals and derogatory tweets in which he for example, wondered if the blue bird was “dying” because certain accounts with a large following post little.
On Friday, he tweeted: “Thanks for the support! with a poll by Bitcoin Archive entitled “Do you want Elon Musk to buy Twitter?” “. Around 73% of the 19,494 voters answered “yes”.
As a supporter of the format, he also posed his own question: “Making Twitter a private company for $54.20 should be up to the shareholders, not the CA.” More than 83% of the 2.9 million votes answered “Yes”.
“I think it’s going to be quite painful and I’m not sure if I can buy it,” the quirky entrepreneur admitted Thursday, before explaining that he hopes to attract as many existing shareholders to his project as possible.
One of them has already reacted: the Saudi prince and investor Al-Walid bin Talal declared on Twitter that he had “rejected” an offer that was too low compared to the “intrinsic value of Twitter”.
But the influence and pressure exerted by Elon Musk doesn’t leave much room for Twitter executives, commented analysts at Wedbush Securities, who after many twists and turns predicted victory for the billionaire.
“The board doesn’t want Musk because they disagree on almost everything and his style doesn’t align with their corporate culture,” said Dan Ives in an analysis published on the Daily Mail Thursday.
“The council will be looking for someone or a group that will give them a better deal. But it will be difficult for other bidders to distinguish themselves. »