(CNN) — Twitter’s board of directors on Friday adopted a limited-term shareholder equity plan that might make it difficult for billionaire Elon Musk to take over the company, called the “poison pill.”
The “poison pill” plan is an anti-capture tactic that preserves the right of shareholders to prevent a competitor from buying more shares at a significant discount, effectively diluting their stake in the company.
Twitter’s board of directors said, in a statement, that the plan aims to preserve the right of shareholders to acquire more shares in the company at a relatively cheap price, effectively reducing Musk’s stake.
The statement added that the plan will be activated if Elon Musk or any other investor acquires more than 15% of the company’s shares.
Billionaire Elon Musk currently owns regarding 9% of Twitter’s shares.
On Thursday, Musk made a $41.4 billion offer to acquire all of Twitter’s shares he did not own, according to a filing with the Securities and Exchange Commission.
