London Daily

Focus on the big picture.
Wednesday, Oct 28, 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
Aberdeen City Council Co-Leader Faces Binding Vote Challenge as Local Councillors Launch High Court Legal Battle
Housebuilding Across Scotland Falls to Eleven-Year Low Despite Government Declarations of a Housing Emergency
Former Prime Minister Gordon Brown Organizes National Innovation Summit in Manchester to Boost Regional Competitiveness
UK Government Faces Mounting Criticism Over Lack of Environmental Consultation During Artificial Intelligence Datacentre Expansion Talks
Greggs Announces Closure of Four Major Manufacturing Facilities Across Britain Resulting in Seven Hundred Forty Job Losses
British Retail Consortium Warns That Cumulative Employment and Regulatory Costs Threaten High Street Price Stability
Lloyds Banking Group Chief Executive Charlie Nunn Warns That Increased Bank Taxes Could Deter Long-Term Economic Investment
Ipsos Polling Reveals Seven in Ten Britons Expect Personal Tax Increases Amid Deep Public Economic Pessimism
Chancellor John Healey Delivers First Autumn Budget in Parliament Amid Tight Fiscal Constraints and Slower Growth Forecasts
United Kingdom Finance Monthly Review Highlights Rising Long-Term Borrowing Costs and Persistent Energy Price Pressures Across British Markets
Royal Marines Pioneer Rapid Autonomous Drone Operations During Major High North Exercise Involving NATO Allies
House of Commons Justice Committee Urges Chancellor to Align Prison and Courts Reform Ambitions With Concrete Budgetary Resources
Government Investigates Rapid Artificial Intelligence Datacentre Expansion Strategy Following Scrutiny Over Power Grid Demands and Planning Backlogs
His Majesty's Inspectorate of Constabulary Warns Third-Party Supplier Breaches Threaten United Kingdom Police and Fire Service Data
Number of British Businesses in Financial Distress Reaches Highest Level in Two Decades Ahead of Fiscal Announcement
Chancellor John Healey Prepares Autumn Budget Amid Intense Market Scrutiny Over Fiscal Headroom and Spending Pressures
Education or Indoctrination? The Growing Debate Over Religious Participation in British Schools
Germany's Vanishing Shopfronts: The Silent Collapse of the Businesses That Built Its Cities
Northern Ireland Executive Reaches Agreement on Public Transport Modernization and Cross-Border Rail Infrastructure Funding
Department for Energy Security and Net Zero Approves New North Sea Carbon Capture and Storage Industrial Clusters
Office for National Statistics Reports Stabilization in Private Rental Growth Across Major English and Welsh Regional Cities
United Kingdom Automotive Manufacturing Output Rises Moderately as Electric Vehicle Assembly Lines Expand in the Midlands
Competition and Markets Authority Launches Formal Inquiry Into Cloud Computing Infrastructure and Artificial Intelligence Partnerships
Scottish Government Finalizes Emergency Budget Adjustments Following Multi-Year Public Sector Funding Shortfalls
National Health Service England Announces Major Emergency Care Overhaul to Alleviate Severe Winter Capacity Pressures
Chancellor Rachel Reeves Prepares Autumn Budget Amid Intensifying Scrutiny Over Public Spending and Fiscal Rules
Bank of England Signals Cautious Approach to Further Interest Rate Cuts as Persistent Wage Growth and Inflation Pressures Remain
Transport for London Unveils Expanded Zero-Emission Bus Fleet to Meet Capital Air Quality Targets
Higher Education Institutions Face Deepening Financial Strain Amid Declining International Student Enrolment
Automotive Industry Leaders Criticize Government Tax Policies and Urge Action on Retail Consumer Confidence
Environment Agency Issues Flood Alerts Across Scottish and English Waterways Following Heavy Rainfall
Independent Audit Highlights Persistent Security Vulnerabilities Across Legacy Government Digital Portals
Northern Ireland Political Leaders Clash Over Westminster Funding Allocations Ahead of Autumn Budget
Ethnic Minorities in England Face Significant Disparities in Routine Breast Cancer Diagnosis Rates
National Police Chiefs Report Alarming Surge in Domestic Abuse Cases Fuelled by Expanding Illegal Cocaine Market
Government Announces Two Hundred and Twenty Million Pound Pothole Funding Boost for Local Highway Authorities
China Issues Formal Warning Over Potential United Kingdom Restrictions on Chinese Electric Vehicles
British Defence Ministers Sign E5 Pact to Enhance European Military Capabilities and Industrial Cooperation Within NATO
United Kingdom Business Activity Expands at Fastest Pace in Eight Months According to S&P Global Flash Survey
Chancellor John Healey Prepares Major Devolution Package and Bank Profit Surcharge Ahead of Upcoming Autumn Budget
National Health Service Consultants in England Announce Two-Day Strike Action Scheduled for November
Major Clean-Up Under Way Across Britain Following Destruction Caused by Consecutive Storms Austen and Boelo
KEY TRENDS TO WATCH
Declassified Intelligence Files Reveal British Security Services Monitored National Health Service Founder
British Government Launches Sweeping Regulatory Crackdown on High-Risk Cosmetic Procedures
Scottish National Party Demands Ban on Using Scottish Revenues to Fund English Nuclear Energy Projects
Mayor of London Initiates Landmark Pedestrianisation of Oxford Street to Revitalise Global Retail Hub
British Judges Granted Expanded Legal Powers to Punish Convicted Killers Who Refuse to Attend Sentencing
United Kingdom Poised to Miss Reduced International Aid Spending Targets Ahead of Fiscal Review
Surging Cocaine Consumption Drives Record Drug Fatalities and Rising Crime Rates Across Britain
×