Twitter, on Friday, 15 April, announced that its board of directors had unanimously adopted a "poison pill" defence after it received an "unsolicited, non-binding proposal" to buy the company.
Tesla CEO Elon Musk, who currently owns about 9 percent of the Twitter's stock, had offered to buy 100 percent of the microblogging site for $43 billion and take it private.
Companies usually use the "poison pill" to defend hostile or unwelcome takeovers to make themselves unattractive to the bidder.
In a statement, Twitter said the poison pill defence or "limited duration shareholder rights plan" or "The Rights Plan" was intended to enable all shareholders to realise the full value of their investment in Twitter.
"The Rights Plan will 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 judgements and take actions that are in the best interests of shareholders," the statement from Twitter added.
Background
In his application with the Securities and Exchange Commission, Musk said, "Since making my investment, I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company."
In a letter delivered to Twitter on 13 April, Musk has offered to "acquire all of the outstanding Common Stock of the issuer not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share".
The price represents a 38 percent premium over the stock's closing price on 1 April, the day Elon publicly announced his acquisition of the shares.
In his letter, Musk said he intends to take Twitter private and would need to reconsider his position as a shareholder if his offer is not accepted. "Twitter has extraordinary potential. I will unlock it," he wrote.
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