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The Twitter board is reportedly not interested in Elon’s takeover offer

The Twitter board is reportedly not interested in Elon’s takeover offer


It’s also said to be considering ways to avoid a hostile takeover

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Twitter’s board may have its work cut out for it.
Twitter’s board may have its work cut out for it.
Photo by Vjeran Pavic / The Verge

Twitter’s board could be in for a fight with the company’s single largest shareholder. According to a report from The Information, it views Elon Musk’s offer to take over the company as unwelcome. This follows Musk’s offer to purchase the company for $43 billion earlier today. The company hasn’t publicly indicated how it’s planning on responding to Musk’s offer, but it’s reportedly planning to address it at an all-hands meeting at 5PM ET / 2PM PT today.

Twitter’s board is also reportedly considering using a “poison pill” strategy to make it more difficult for Elon to acquire a large stake in the company and avoid a hostile takeover. Poison pills can, as one example, flood the market with shares once an investor acquires stock above a certain limit, making them easier to acquire for others (and costly for a single investor to buy up) when someone attempts a takeover.

As Stratechery’s Ben Thompson points out, Twitter already has some poison pill provisions in its bylaws including the board’s ability to issue “blank check” preferred stock without prior approval; you can find the provisions on page 34 of this PDF.

This afternoon, Musk polled his Twitter followers with a rather leading prompt: “Taking Twitter private at $54.20 should be up to shareholders, not the board”.

It’s hard to say whether Musk will be deterred by Twitter’s tactics, provided he can actually come up with the money required to take the company private. In a TED interview on Thursday, he said the acquisition wouldn’t be about making money — he’s frequently cited “free speech” as the main reason for his interest in Twitter. Though, Musk has promised and failed to take companies private before.

In the same TED interview, Musk said he had a plan B if Twitter doesn’t accept his offer, and while he refused to explain it at TED, he may have already given us a hint. In his offer letter to Twitter’s board, he said that he would “need to reconsider [his] position as a shareholder” if the company refuses his buyout. Musk recently purchased 9.2 percent of the company’s shares but declined a position on the board.

Update, 3:42PM ET: Added that Twitter already has some poison pill provisions.

Update, 4:23PM ET: Added Musk’s tweet.