By Nathalie Voit

In the latest development of the weeks-long saga between Elon Musk and Twitter, the social media service announced it will adopt a limited duration shareholder rights plan, known as a “poison pill” in the industry.

Twitter’s board unanimously voted to adopt the plan due to concerns about a potential hostile takeover from Elon Musk. On April 14, the Tesla CEO attempted to outright buy the company for $43 billion, or $54.20 a share.

The news came after the billionaire entrepreneur rejected Twitter’s offer to join its board.

Musk revealed on Thursday that his decision not to join the board was informed by his belief that the social media giant must go private as it “will neither thrive nor serve the societal imperative [of free speech] in its current form.”

“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced,” Musk wrote in a letter sent to Twitter Chairman Bret Taylor and disclosed in a securities filing. “My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he said.

With Musk no longer limited to owning just 14.9% of the company’s stock, Twitter scrambled to find a possible solution to fend itself against a potential takeover.

The board ultimately arrived at the “Rights Plan.” Under the new arrangement, if any entity, person, or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock without the board’s approval, other shareholders will be able to purchase additional Twitter stock at a discount.

“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 company said in a press release.

Twitter noted the plan does not prevent the board from accepting an acquisition proposal if the board determines it is in the best interests of Twitter and its shareholders.

The plan is set to expire on April 14, 2023, Twitter said.

Musk is Twitter’s largest shareholder, with a 9.2% stake in the company, according to an SEC filing disclosed on April 4.