Recently, you might have heard about Twitter using a “poison pill” option to fend off a hostile takeover. While it sounds like something a Wicked Queen would use in a fairy tale, the poison pill is not uncommon.
A hostile takeover happens when a company doesn’t want to change hands and takes measures to prevent it. The defensive move is the poison pill, a business strategy that makes the takeover more difficult or expensive. Such a move is usually part of a shareholder rights plan.
In the case of Twitter, the company plans to offer shareholders a discounted price on stock should a single entity purchase more than a 15% stake.
Questions about the poison pill practice? There's no need to get “twitterpated.” We’d love to discuss it with you.