- Marxist leader set to become Sri Lanka's next president
- From blades to pull-up bars: UK charity tackles knife crime
- Swiss vote on pensions and environment protections
- No pain, no gain: Chinese pro wrestlers fight for recognition
- UAE leader seeks to deepen 'strategic' ties in US visit during Mideast crisis
- Hezbollah takes heavy hits but still fighting Israel
- Floods, landslides hit central Japan months after major quake
- All Blacks coach Robertson demands better finishing
- Argentina edge South Africa to keep title hopes alive
- Biden says China 'testing us,' in hot mic remarks to Quad allies
- Dubois destroys Joshua to retain IBF world heavyweight crown
- Guardiola says critics want Man City wiped 'from face of the Earth'
- Biden says 'Quad' is 'here to stay' despite challenges
- Dubois knocks out Joshua to retain IBF world heavyweight crown
- Vinicius helps 'faster' Madrid overturn stubborn Espanyol
- Zelensky to press US on long-range missile strikes inside Russia
- PSG drop first points in draw at Reims
- Vinicius, Mbappe on target as Madrid crush plucky Espanyol
- Jeeno leads Ko by two at LPGA Queen City Championship
- Bottega Veneta goes for 'E.T.' chic as Madonna pops into D&G
- Messi, Miami frustrated by New York late leveler
- Musk's X platform takes first step toward lifting Brazil ban
- 'Business as usual' for Australia match-winner Carey amid boos
- Israeli jets pound Lebanon after deadly Beirut strike
- Ten Hag bemoans Man Utd's lack of killer instinct in Palace stalemate
- France's Macron appoints new government in shift to right
- Cheika proud of Leicester grit after winning start as boss
- Profligate Man Utd pay price in 0-0 draw at Palace
- Kane, Olise run riot as Bayern thump Bremen
- Diaz fires Liverpool top of Premier League, Man Utd held at Palace
- LIV champion Rahm out of LIV Team semis with severe flu
- Slot surprised by tearful Nunez's moment of magic
- Title rivals Norris, Verstappen on 'cool' front row for Singapore GP
- Biden talks China with 'Quad' leaders in hometown summit
- Juve and Napoli play out goalless draw in early Serie A title tussle
- Alcaraz fears tennis tour grind will 'kill us'
- Carey sparks recovery as Australia thrash England in 2nd ODI
- Leclerc, Sainz lament 'disappointing' Saturday in Singapore
- Bottega Veneta holds investors' aces as Madonna pops into D&G
- Beirut digs for victims at building flattened in Israeli strike
- Verstappen stages protest over 'ridiculous' swearing punishment
- Bayern boss Kompany lauds 'special talent' Olise
- Diaz fires Liverpool top of Premier League, Spurs bounce back
- Heavy fire over Israel-Lebanon border after deadly Beirut strike
- Ramos guides unbeaten Toulouse to Montpellier win despite Hogg scuffle
- Myanmar flood death toll jumps to 384
- Chelsea owners 'happy' with win at West Ham amid rift report
- Kane and Olise run riot as Bayern thump Bremen
- Ramos guides unbeaten Toulouse to Montpellier win
- Norris pips Verstappen to dramatic Singapore pole after Sainz crash
Will Twitter's 'poison pill' be too tough for Elon Musk to swallow?
The so-called "poison pill" Twitter has proposed to use against Elon Musk's potential hostile takeover is a mechanism with a proven track record that could force the outspoken entrepreneur into negotiations.
To halt a takeover, the board plans to activate the pill if the Tesla CEO comes to own more than 15 percent of Twitter.
He already holds 9.2 percent of the company, and said Thursday he has ready the $46.5 billion necessary to make an offer for the rest.
Such a "pill" would allow other Twitter shareholders to purchase shares at half price, increasing the amount of shares in circulation and weakening Musk's influence.
It would then be nearly impossible for him to take total control of the company without having to spend significantly more than he had originally planned.
"The dilution created by this defense has generally served its intended deterrence effect," explained Eric Wehrly, associate professor of finance at Western Washington University.
The "poison pill" was invented 40 years ago by business lawyer Martin Lipton to counteract a wave of hostile takeovers on Wall Street.
"It was the age of the corporate raiders," Lipton explained to the media site The Deal in 2011, from investors such as Carl Icahn to Kirk Kerkorian.
Quickly contested in court, the practice was declared legal for the first time in 1985 by the Delaware Supreme Court -- a tax friendly state where Twitter, although officially based in Californian, is incorporated.
"Delaware is the home to roughly half of publicly traded companies in the US and has fairly well established law regarding the implementation of poison pills," said Jon Karpoff, a finance professor at the University of Washington.
"Unless there's something unusual about Twitter's pill, which I would highly doubt... Musk would be unlikely to have a successful legal challenge," he said.
Boston College associate law professor Brian Quinn doesn't think the issue will even end up in court.
"Elon Musk has no case," he said.
- Negotiate and rally -
An alternative to acquiring the majority of the company would be for Musk to change the makeup of the board, according to Quinn, installing new members more in line with his vision for Twitter.
But the agenda for Twitter's next general meeting, on May 25, is already set, meaning Musk would have to wait until the next general meeting in 2023 to even bring it up.
And the board of directors can only be removed in batches, anyways.
Some members' terms are up this year, while others will remain in their position until 2023, 2024 or 2025.
Musk wouldn't be able to win over a majority of the board until at least 2024.
According to Quinn, "there's no record of an acquirer overcoming the pill by replacing the board through two successive elections."
"The only option for an acquirer is to negotiate with the board of directors," Quinn said, presumably by proposing an even higher offer, but without any guarantee of success.
And in the event of a negotiation, Musk wouldn't be able to count on the support of former Twitter head and co-founder Jack Dorsey, unless there is a quick resolution.
Dorsey, who has previously expressed affinity for the billionaire, announced after his resignation in November that he would not run for another term as director and would step down after this year's meeting.
In tandem with the official negotiations, Musk would have to start making his case to shareholders, according to Karpoff, a task which has already begun -- mainly by tweeting.
"And I think his personal popularity among a lot of people will help them in that," Karpoff said.
"I wouldn't be surprised if we even got a bunch of retail investors involved in struggling to acquire Twitter shares, and joining the attempt to pressure board members to strike a deal with Musk."
W.Lapointe--BTB