London Daily

Focus on the big picture.
Saturday, Mar 21, 2026

What is Twitter’s ‘poison pill’ and what is it supposed to do?

What is Twitter’s ‘poison pill’ and what is it supposed to do?

On Friday, Twitter’s board showed it will not go quietly after Musk offered to buy the company.

Twitter is trying to thwart billionaire Elon Musk’s takeover attempt with a “poison pill”, a financial device that companies have been wielding against unwelcome suitors for decades.

On Thursday, Musk offered to buy Twitter with the revelation coming just days after the Tesla CEO said he would no longer be joining the social media company’s board of directors.

He offered $54.2 per share of Twitter’s stock, calling the price his best and final offer.

On Friday, Twitter’s board showed it will not go quietly, saying any acquisition of more than 15 percent of the firm’s stock without its approval would trigger a plan to flood the market with shares and thus make a buyout much harder.

What are poison pills supposed to do?


The ingredients of each poison pill vary, but they are all designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive.

The strategy was popularised in the 1980s when publicly held companies were being stalked by corporate raiders such as Carl Icahn – now more frequently described as “activist investors”.

Twitter did not disclose the details of its poison pill on Friday but said it would provide more information in a forthcoming filing with the Securities and Exchange Commission, which the company delayed because public markets were closed on Friday.

Musk currently holds a roughly 9 percent stake.

Can a poison pill be a negotiating ploy?


Although they are supposed to help prevent an unsolicited takeover, poison pills also often open the door to further negotiations that can force a bidder to sweeten the deal.

If a higher price makes sense to the board, a poison pill can simply be cast aside along with the acrimony it provoked, clearing the way for a sale to be completed.

True to form, Twitter left its door open by emphasising that its poison pill will not prevent its board from “engaging with parties or accepting an acquisition proposal” at a higher price.

Adopting a poison pill also frequently results in lawsuits alleging that a corporate board and management team is using the tactic to keep their jobs against the best interests of shareholders.


How did Musk react to Twitter’s announcement?


Musk, with 82 million followers on Twitter, had no immediate reaction to the company’s poison pill.

But on Thursday he indicated he was ready to wage a legal battle.

“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” Musk tweeted. “The liability they would thereby assume would be titanic in scale.”

Musk has publicly said his $43bn bid is his best and final offer for Twitter, but other corporate suitors have made similar statements before ultimately upping the ante.

With an estimated fortune of $265bn, Musk would seem to have deep enough pockets to raise his offer, although he is still working out how to finance the proposed purchase.

Musk also questioned Saudi Arabia’s role in Twitter Inc after the kingdom’s Prince Alwaleed bin Talal tweeted his opposition to the billionaire entrepreneur’s offer to buy the social media company.

The prince tweeted on Thursday that Musk’s offer does not come close to the “intrinsic value” of Twitter.

“Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer,” the prince said, referring to the Saudi Arabia-based Kingdom Holding Company, which he owns.

Musk responded to the tweet, asking how much of Twitter, directly and indirectly, was owned by Saudi Arabia.

“What are the Kingdom’s views on journalistic freedom of speech?” Musk added.


Newsletter

Related Articles

0:00
0:00
Close
Lord Walney Warns of Expanding Iranian Influence Networks Within the United Kingdom
Iranian National Among Two Arrested After Attempt to Access UK Nuclear Submarine Base
Deregulation, Artificial Intelligence, and Fraud Laws Reshape UK Financial Services Landscape
UK Considers Lower Speed Limits to Reduce Fuel Use Amid Escalating Energy Crisis
UK Borrowing Costs Surge to Post-Crisis High as Markets React to Inflation and War Risks
UK Government Prepares Emergency Economic Measures as Iran Conflict Fuels Financial Risks
Meningitis B Outbreak in the UK Raises Urgent Health Warnings as Cases Surge
Iran Issues Stark Warning to Britain Over US Base Access Amid Expanding Conflict
United Kingdom Authorizes US Strikes from British Bases as Iran Threatens Key Shipping Routes
Reform UK Suspends Scottish Candidate Following Financial Misconduct Allegations
Apple issues an unusual warning: this is how your iPhone can be hacked without you doing anything
UK and Nigeria Reach Agreement to Accelerate Return of Irregular Migrants
UK Sets New Aid Priorities Following Significant Budget Reductions
Cyprus President Urges Open Dialogue Over Future of British Sovereign Base Areas
Cyprus President Urges Open Dialogue Over Future of British Sovereign Base Areas
UK Plans 50% Steel Tariffs in Bold Move to Protect Domestic Industry
Iran Conflict Sends Shockwaves Through UK Economy as Energy Costs and Trade Risks Surge
UK Health Officials Warn Kent Meningitis Outbreak Still Active as Cases Continue to Rise
UK Climate Progress Faces Scrutiny Over Reliance on Carbon Accounting Methods
UK Deploys Advisers to United States to Shape Plan for Reopening Strait of Hormuz
Amazon Bets on AI-Driven Alexa Upgrade to Revive UK Smart Speaker Market
UK Abortion Law Changes Spark Strong Response from Church Leaders and Pro-Life Advocates
UK Abortion Law Changes Spark Strong Response from Church Leaders and Pro-Life Advocates
GB News Faces Regulatory Complaints Over On-Air Remarks on ‘Genocide’ Claims
UK Signals Expanded Support for Gulf Allies as Iranian Attacks Intensify Regional Threats
UK VAT Decision Opens Path for Potential Refunds to U.S. Biopharma Firms
UK and Canada Advance ‘Middle Power’ Strategy to Shape Global Influence Beyond Superpowers
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Holds Back on Hormuz Escort Mission While Continuing Talks with Allies
TrumpRx Pricing Platform Faces Scrutiny as Some Medicines Remain Costlier Than in the UK
UK, Netherlands and Finland Explore Joint Defence Investment Bank to Boost Military Capability
Deadly Meningitis Outbreak in Kent Raises Alarm as Cases Surge and Emergency Response Expands
UK Security Adviser Viewed US-Iran Nuclear Deal as Within Reach Before Sudden Escalation
UK Prime Minister Urges Continued Focus on Ukraine Amid Escalating Iran Conflict
UK Introduces New Safeguards to Shield Lenders from Bank Run Risks
UK Promotional Products Market Surpasses £1.3 Billion as Demand Strengthens in 2025
Reeves Pushes for Deeper UK-EU Economic Ties to Revive Growth
UK Security Adviser Saw No Imminent Iranian Nuclear Threat Days Before War Erupted
France Signals Warm Welcome for UK Return to EU Single Market Amid Renewed Cooperation Talks
UK Defence Official Criticises Boeing Over Delays to E-7 Wedgetail Programme
UK Urged to Secure Quantum Talent as Minister Warns Against Repeating AI Setbacks
UK Mayors Set to Gain New Spending Powers Under Reeves’ Fiscal Devolution Plan
Western Allies Urge Restraint as Israel Weighs Expanded Ground Operation in Lebanon
Trump Warns NATO Faces ‘Very Bad’ Future Without Stronger Allied Support in Iran Conflict
UK Minister Says Britain Not Bound to Support Every Demand From U.S. President
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
×