Tesla CEO Elon Musk said today that Twitter’s board of directors would lose its job if its offer to take over the major social network was successful.
“The board’s salary will be zero dollars if my offer succeeds, so that’s saved about $ 3 million a year,” Musk said in a tweet, saying the board’s interests were not in line with the interests of the company’s shareholders.
A few days ago, Musk made an offer to buy Twitter for a total of $ 43 billion, or $ 54.20 per share, and make it a private company.
Shortly afterwards, the company’s board of directors adopted the so-called “Poison Pill” plan to prevent its buyout. The “poison pill” is a tactic used to prevent hostile takeovers and acquisitions. In most cases, “poison pills”, when triggered, dilute the value of each share to make it harder for the offeror to take control of a company when it is acquired.
Late Friday night, Twitter.Inc announced that its board of directors had adopted a “limited shareholder rights plan” after Elon Musk offered to acquire the company and make it private.
According to a statement published by Twitter, if a shareholder chooses to acquire a stake in the company of more than 15%, other shareholders will be able to “buy, at the current exercise price, additional ordinary shares with a current market value twice the exercise price of the right “. In practice, such a decision will allow other shareholders to buy additional shares at a discount.
The tactic, also known as the “poison pill,” is common practice in attempts to prevent hostile takeovers of companies. The rights plan expires on April 14, 2023.
It is unclear who will be appointed to the company’s board if Musk manages to acquire it.
Twitter currently spends about $ 2.9 million a year in cash and shares on board members. The executive directors do not receive additional compensation, so this amount does not include payments to Parag Agraval and his predecessor Jack Dorsey.
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