There is one minor inaccuracy, but we will get to that in a moment. The punch-line is that in perhaps over 600 adopted pill cases (over the 40 plus years they've existed), only a handful were ever invalidated by the courts, and none -- not one -- ever had to go all the way to triggering the flip-in/flip-over, to thwart a hostile bidder.
Not. . . one. The pills (unless stricken by a court) have always allowed the management time to work out a friendly deal -- and in about half of all cases, the target remains independent, even after four years. [The low-ball, green-mail, back-end loaders' threats are. . . blunted.] Now you know.
The small inaccuracy is that this professor is unaware that the latest pills provide for a delayed, longer-acting "poison" (called a "Flip-Over"), if/when the unwelcome bidder runs a tender offer. When the unwelcome bidder shows up with all the shares he's bought, the pill contains a feature that grants huge cash dividends on those shares that were NOT tendered, so NOT payable to the people from whom Elon bought, BUT OUT OF THE BIDDER'S (Elon's) coffers, not the target's. In the Twitter case, it would pay the people who did not tender $420 per share in cash, from Musk's own pocket. That is beyond his reach by a great distance, if he needs 50% of the shares. . . he'd owe about $950 billion. His net worth is around $320 billion. No way, meet no how.
This in all practical cases, causes essentially all such hostile tender offers to. . . fail. From time to time, hostile bidders then try so-called "two-step" tenders -- saying they will only pay the delivering shareholders in full. . . AFTER they get control [and invalidate the pill]. They offer about a ten per cent down feature.
But modern pills, again, grant the non-tendering holders a right to vast dividends, FROM the bidders' coffers, at the moment before a control vote is to occur. That is, instead of what Musk offers, the non-tendering shareholders will get $420 a share from Musk.
Q.: Who would ever tender to Musk then?
Yes, I am saying this scotches any "real world" probability of a two tier tender working -- and Delaware courts have repeatedly upheld this provision as fully enforceable at law.
So -- the professor is wrong insofar as she suggests a Musk tender could/would be a solution. It won't be a realistic one, because Twitter adopted a very modern pill.
Cheers -- and be excellent to one another -- feeling much better, due to friends -- and. . . Europa!
नमस्ते
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