Twitter Adopts Limited Duration Shareholder Rights Plan, Enabling All Shareholders to Realize Full Value of Company

Rhea-AI Summary

Twitter, Inc. (NYSE: TWTR) announced a limited duration shareholder rights plan on April 15, 2022. This initiative aims to protect shareholders by preventing any entity from gaining control without proper compensation. The plan triggers if an entity acquires 15% or more of Twitter's common stock without Board approval, allowing existing shareholders to purchase additional shares at a favorable market value. The Rights Plan will expire on April 14, 2023, and additional details will follow in a Form 8-K filing with the SEC.

Positive

• The Rights Plan aims to enhance shareholder value by safeguarding against unsolicited acquisitions.
• The Board retains authority to engage in discussions regarding acquisition proposals deemed beneficial.

Negative

• The Rights Plan could deter potential buyers, impacting acquisition interest.
• The plan requires shareholders to potentially buy additional shares at higher values, which could dilute existing ownership.

SAN FRANCISCO, April 15, 2022 /PRNewswire/ -- Twitter, Inc. (NYSE: TWTR) today announced that its Board of Directors has unanimously adopted a limited duration shareholder rights plan (the "Rights Plan"). The Board adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter.

The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.

The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.

The Rights Plan is similar to other plans adopted by publicly held companies in comparable circumstances. Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.

The Rights Plan will expire on April 14, 2023.

Additional information regarding the Rights Plan will be contained in a Form 8-K to be filed by Twitter with the U.S. Securities and Exchange Commission.

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SOURCE Twitter, Inc.

FAQ

What is Twitter's Rights Plan announced on April 15, 2022?

Twitter's Rights Plan is a strategy to protect shareholders from unwanted control by entities acquiring a significant percentage of shares.

How does Twitter's Rights Plan benefit shareholders?

It ensures shareholders receive fair value during any acquisition attempts by preventing low-ball offers.

What is the triggering threshold for Twitter's Rights Plan?

The Rights Plan activates if an entity acquires 15% or more of Twitter's outstanding common stock without Board approval.

When does Twitter's Rights Plan expire?

The Rights Plan is set to expire on April 14, 2023.

Will Twitter still consider acquisition offers with the Rights Plan in place?

Yes, the Board can engage with parties and consider acquisition proposals that align with shareholder interests.