As I said last night, Musk may litigate whether the pill is properly in place, but in general, similar so-called "limited duration" poison pills have been upheld in the Delaware courts, even when a hostile bidder has already surfaced (i.e., Musk's nonsense).
The pill (or "rights plan", as it is more politely called, in a courtly mannered discussion) allows the board to negotiate over time on behalf of the public shareholders (those not part of a formal Musk-led takeover group). And not just with the "drunken monkey kung fu", of one Elon Musk.
This is the preferred defense response. . . because it is deadly effective against green-mailers and sh!tposters, like Elon.
Here's a bit of the press release -- we will have more when the actual rights plan is filed on SEC Form 8-K, tonight:
. . .The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.
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 Rights Plan is similar to other plans adopted by publicly held companies in comparable circumstances. Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right. . . .
See ya', Elon -- "you have been weighed, you have been measured. . . and you have been found. . . wanting. Here's to the new world. May. . . God save you, if it is right, that He do so. . . ."
Yes -- I am saying this is effectively -- game over. He's been outplayed. Be excellent to one another, this Easter weekend -- and always. . . . smile.
[With sincere apologies to the late Heath Ledger.]
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