Takeovers areusually friendly affairs.
After some negotiating, the companies engaged in the merger or acquisition announce a deal has been struck.
But other takeovers are more hostile in nature.
Not every company wants to be taken over.
This is the case withElon Musks US$43 billion bidto buy Twitter.
Companies have various measures in their arsenal to ward off such unwanted advances.
It is designed to block an investor from accumulating a majority stake in a company.
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Let me explain why poison pills have been effective at warding off unsolicited offers, at least until now.
Whats a poison pill?
Twitter adopted a similar measure.
Poison pills are useful in part because they can be adopted quickly, but they usually have expiration dates.
The poison pill adopted by Twitter, for example, expires in one year.
And judging by his tweets to his82 million Twitter followers, thatseems to be what Musk is doing.
