Twitter moved on Friday to block the tech baron Elon Musk’s proposed takeover of the social media company, adopting a strategy known as a “poison pill” that’s often used to intercept hostile corporate bids.
The Twitter board of directors voted unanimously to adopt the strategy, which is formally known as a shareholder rights plan, the company said in a statement posted online.
“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter,” the San Francisco-based company said.
Several news organizations including Bloomberg had reported on Thursday that the Twitter board was considering the poison-pill defence.
The approach allows existing shareholders other than the person attempting the takeover to buy additional shares at a discount, neutralizing the equity of the person of Elon Musk.
Musk on Thursday announced an offer to buy Twitter in a $40 billion deal that would take shares of the company’s stock off public markets and give Musk complete control. He said Twitter’s rules for online speech had become too burdensome, choking off some public debate that should be heard even if it’s hate speech.
Twitter did not comment on the details of Musk’s proposal, and the company kept open the possibility of reaching a deal for a possible takeover.
“The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders,” the company said.
Twitter’s annual shareholder meeting is scheduled for May 25, an event that could provide another forum for Musk to air his grievances or seek to influence Twitter’s direction.