Plan takes effect if his stake grows to 15 percent or more Poison pills are often used to defend against hostile takeovers DUBAI: Twitter’s board of directors has unanimously adopted a “poison pill” defense in response to Elon Musk’s proposal to buy the company and take it private. A poison pill defense, or shareholder rights plan, is a strategy used to prevent or discourage a potential hostile takeover. One of the most common tactics employed is allowing existing shareholders — other than the person attempting the takeover — to buy additional shares at a discount. Twitter said in a statement that its “Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter,” and “it will reduce the likelihood” of anyone trying to gain control of Twitter without either paying shareholders a premium or giving the board more time. The plan would take effect if Musk’s stake grew to 15 percent or more. Even then, Musk could still take over the company with a proxy fight by voting out the current directors, AP reported. Twitter said the plan “does not prevent the board from engaging with parties or accepting an acquisition proposal” if the board believes it to be in the best interest of Twitter and its shareholders. In a TED Talk yesterday, Musk said that he would like to retain as many shareholders as allowed in a private company. However “it isn’t about money,” he said, adding that this “strong intuitive sense” was that having a platform that was “maximally trusted and broadly inclusive is important to the future of civilization. I don’t care about the economics at all.” The Rights Plan will expire on April 14, 2023.