In response to Elon Musk’s all-cash takeover offer for Twitter, its board of directors has adopted a one-year shareholder rights plan to stop it. As Lucas Manfredi reported for FOX Business, the board claimed the plan “is intended to enable all shareholders to realise the full value of their investment in Twitter” and “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.”
The so-called shareholder right’s plan would be implemented “if an entity, person or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board”, allowing the other shareholders to buy additional shares of common stock at half the current price, which is a ‘free money’ proposition for them.
