Twitter Adopts 'poison Pill' Defence Against Musk Bid

Twitter moved on Friday to defend itself against Elon Musk's US$43 billion hostile takeover bid, announcing a plan that would allow shareholders to purchase additional stock.

Musk's proposal faces uncertainty on multiple fronts, including possible rejection and the challenge of assembling the cash, but could have wide-reaching impacts on the social media service if consummated.

Twitter's board has unanimously adopted a so-called shareholder rights plan, also known as a "poison pill", as the struggle for control of the social media platform intensified.

"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," Twitter said in a statement.

Musk sent shockwaves through the tech world on Thursday with an unsolicited bid to buy the company, stating the promotion of freedom of speech on Twitter as a key reason for what he called his "best and final offer".

The world's richest person offered US$54.20 a share, which values the social media firm at some US$43 billion, in a filing with the Securities and Exchange Commission made public on Thursday.

Musk told a conference in Canada that he was "not sure" he would succeed and acknowledged a "plan B" but refused to elaborate, though in the filing he noted a rejection would make him consider selling his shares.

Musk last week disclosed a purchase of 73.5 million shares – or 9.2 percent – of Twitter's common stock, an announcement that sent its shares soaring more than 25 percent.

The board's "rights plan" kicks in if a buyer takes 15 percent or more of Twitter's outstanding common stock in a transaction not approved by the board.

Musk said he "could technically afford" the buyout while offering no information on financing, though he would likely need to borrow money or part with some of his mountain of Tesla or SpaceX shares. (AFP)