Twitter says it has adopted a limited duration shareholder rights plan, known as a “poison pill”.
In a statement on Friday, the company said its board of directors voted unanimously to adopt the strategy.
The poison pill is often used to intercept hostile corporate bids by diluting the stake of the entity eyeing the takeover.
The development comes a day after Elon Musk, the billionaire founder of Tesla Inc., offered to buy the company for $43 billion.
Under the new structure, if any person or group acquires beneficial ownership of at least 15 per cent of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount.
The plan is set to expire on April 14, 2023.
“The Board adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter,” the statement reads.
