If Musk Sues To Invalidate The Twitter Pill, As Early As Tomorrow -- This Williams Case Will be Much Discussed...

But, as someone pretty-closely involved in pill designs -- since the very early days, I can say with some confidence that the Williams case will offer Elon scant shelter (as I said yesterday, as well, here).

Elon is seeking a classic take-over of Twitter now. The Twitter pill kicks in at 15% not 5%, as in Williams. And, Elon has shown himself to be a "bad actor" as to SEC rules in general, and the takeover disclosure rules in particular. That will seal it -- but here is a bit of history from the 90 page Delaware opinion, for people who don't follow developments in public company take-over defense matters:

. . .Of all the defenses developed to fend off hostile takeovers, the poison pill was among the most muscular. These bulwarks gained judicial imprimatur in 1985 when the Delaware Supreme Court upheld a poison pill as an antitakeover device in Moran v. Household International, Inc.

Moran also established intermediate scrutiny under Unocal as the legal framework for reviewing stockholder challenges to poison pills. Poison pills metamorphosed post-Moran. The flip-over feature of the Moran pill was augmented by a flip-in feature. After the adoption of state anti-takeover statutes, trigger thresholds crept down from the 20% threshold of Moran to 15%, and then to 10% in some instances.

The pill’s initial success engendered mission creep. Originally conceived as anti-takeover armaments, poison pills were redirected to address other corporate purposes such as protecting net operating loss assets.

Recently, pills have been deployed to defend against stockholder activism. The plaintiffs in this litigation challenge an anti-activist pill adopted by the board of directors of The Williams Companies, Inc. (“Williams” or the “Company”) at the outset of the COVID-19 pandemic and amid a global oil price war. The Williams pill is unprecedented in that it contains a more extreme combination of features than any pill previously evaluated by this court—a 5% trigger threshold, an expansive definition of “acting in concert,” and a narrow definition of “passive investor. . . .”

Unocal calls for a two-part inquiry, asking first whether the board had reasonable grounds for identifying a threat to the corporate enterprise and second whether the response was reasonable in relation to the threat posed. . . .

Should be a busy news day tomorrow, as the actual full text of the Twitter pill will be disclosed at the SEC EDGAR window. . . and we may yet see other bidders emerge, if the New York Post is to be believed. We may see Musk bow out, if he was sh!t-posting about it all. Stay tuned. Grinning into the night, now. . . .

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