The board set up a shareholder rights plan, exercisable if a party acquires 15% of the stock without prior approval, lasting for one year only.
Twitter enacted the plan to buy time, according to a person familiar with the matter.
Musk, who said it was his “best and final” offer, had already accrued a stake of more than 9% in Twitter since earlier this year.
In addition to Musk’s offer, Twitter has been fielding takeover interest from other parties, including technology-focused private equity firm Thoma Bravo, Bloomberg reported earlier Friday.
A poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party.
At least one prominent investor, though, said the offer was too low and the market reaction appeared to agree.
But in his filing earlier in the day, he said he would rethink his investment if the bid failed.
While it’s unclear what founder and board member Jack Dorsey thinks of Musk’s deal, he at least shares the opinion that Twitter might be better off private.
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