Twitter's 'The Rights Plan' Responds to Elon Musk's Takeover Bid

　　In the latest twist in the relationship between Tesla CEO Elon Musk and microblogging network Twitter, Twitter's board of directors has voted to activate the Rights Plan in response to Musk's $43 billion proposal to buy over the platform and take it private.

　　The announcement was made last Friday to the US Securities and Exchange Commission.

　　The Rights Plan, colloquially known as the 'Poison Pill,' is a defensive tactic used by businesses in the event of a hostile acquisition. It's been around for decades and has been proven to work. The technique is being used to counter Musk's unsolicited acquisition proposal.

　　When an individual or corporation, in this example, Musk, buys more than a 15% ownership in a deal that has not been approved by the board, Twitter is forced to flood the market with its shares without its permission. As a result, shareholders can acquire more shares at a bargain while also neutralizing his shares and maintaining the board in control in the event of an unsolicited takeover. The strategy will be in effect until April 14, 2023.

　　The board's approach will reduce the likelihood of an individual or company gaining control of the platform through open market accumulation without paying a control premium to all shareholders. Also, giving the board adequate time to make an informed judgment in the best interests of the forum. The board also stated that the strategy does not preclude it from evaluating future bids as long as they are in the best interests of the company and its shareholders.

　　Musk's Options

　　The Tesla CEO is apparently in talks with other investors about supporting and collaborating on his $43 billion attempt to acquire the microblogging site. He may work with Silver Lake Partners, an international equity firm that specializes on technology investments.

　　Musk could also purchase the platform through a “proxy war,” in which the company's shareholders vote to keep or oust the current board of directors. Musk can also go to court to challenge the board's proposal, but victory is not guaranteed because no court has overturned the poison pill in three decades.

　　Some Twitter investors, including Saudi Prince Alwaleed bin Talal, have already expressed their displeasure with Musk's proposal, and the takeover attempt has been thwarted further as Vanguard Group has increased its stake in Twitter to 10.2 percent, a higher stake than Musk's, and the firm is unlikely to sanction the Dogecoin enthusiast's takeover attempt.

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