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Twitter introduces poison pill to thwart Musk’s offer

Twitter has approved a poison pill construction to complicate a takeover by Elon Musk. Saudi Prince Alwaleed bin Talal, a major shareholder of the social media company, said he thinks the Tesla CEO’s offer is too low.

Musk, the owner of Tesla and SpaceX, launched a hostile takeover bid on Twitter on Thursday for $54.2 per share. Musk owns 9.1 percent of the company after recent purchases. Musk’s takeover bid values ​​the company at $43 billion. Musk made it clear that it is his ‘best and last’ offer and that he does not want to raise the price any further.

But Twitter thinks Musk’s offer is far too low and has been working on options since Thursday to decline it. The board of directors approved the so-called poison pill on Friday. This provides that existing shareholders will be given the right to buy new shares at a discount if a party undesirably acquires more than 15 percent of the shares. By issuing more shares, the cost of a squeeze-out for Musk increases and the interest of the unwanted guest dilutes. The friendly shareholders can also undertake not to sell their shares to Musk.

At least one major investor has indicated that he thinks the offer is too low. Saudi Prince Alwaleed bin Talal said the bid price “isn’t close to the intrinsic value” of the platform. Bin Talal is said to own 5.2 percent of Twitter. The asset manager Vanguard is the largest party in the capital with a stake of 10.3 percent.

Musk said at a TED conference on Thursday that he wasn’t sure his bid would succeed. Wall Street also has serious doubts. The course of Twitter

closed Thursday at $45.08 and failed to come close to the bid price throughout the day.

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