World

The so-called “poison pill” Twitter has proposed to use against Elon Musk’s potential hostile takeover is a mechanism with a proven track record that could force the outspoken entrepreneur into negotiations.

To halt a takeover, the board plans to activate the pill if the Tesla CEO comes to own more than 15 percent of Twitter. 

He already holds 9.2 percent of the company, and said Thursday he has ready the $46.5 billion necessary to make an offer for the rest.  

Such a “pill” would allow other Twitter shareholders to purchase shares at half price, increasing the amount of shares in circulation and weakening Musk’s influence. 

It would then be nearly impossible for him to take total control of the company without having to spend significantly more than he had originally planned. 

“The dilution created by this defense has generally served its intended deterrence effect,” explained Eric Wehrly, associate professor of finance at Western Washington University. 

The “poison pill” was invented 40 years ago by business lawyer Martin Lipton to counteract a wave of hostile takeovers on Wall Street. 

“It was the age of the corporate raiders,” Lipton explained to the media site The Deal in 2011, from investors such as Carl Icahn to Kirk Kerkorian.  

Quickly contested in court, the practice was declared legal for the first time in 1985 by the Delaware Supreme Court — a tax friendly state where Twitter, although officially based in Californian, is incorporated.

“Delaware is the home to roughly half of publicly traded companies in the US and has fairly well established law regarding the implementation of poison pills,” said Jon Karpoff, a finance professor at the University of Washington. 

“Unless there’s something unusual about Twitter’s pill, which I would highly doubt… Musk would be unlikely to have a successful legal challenge,” he said.

Boston College associate law professor Brian Quinn doesn’t think the issue will even end up in court. 

“Elon Musk has no case,” he said. 

– Negotiate and rally –

An alternative to acquiring the majority of the company would be for Musk to change the makeup of the board, according to Quinn, installing new members more in line with his vision for Twitter. 

But the agenda for Twitter’s next general meeting, on May 25, is already set, meaning Musk would have to wait until the next general meeting in 2023 to even bring it up. 

And the board of directors can only be removed in batches, anyways.

Some members’ terms are up this year, while others will remain in their position until 2023, 2024 or 2025.

Musk wouldn’t be able to win over a majority of the board until at least 2024.

According to Quinn, “there’s no record of an acquirer overcoming the pill by replacing the board through two successive elections.”

“The only option for an acquirer is to negotiate with the board of directors,” Quinn said, presumably by proposing an even higher offer, but without any guarantee of success.

And in the event of a negotiation, Musk wouldn’t be able to count on the support of former Twitter head and co-founder Jack Dorsey, unless there is a quick resolution.

Dorsey, who has previously expressed affinity for the billionaire, announced after his resignation in November that he would not run for another term as director and would step down after this year’s meeting. 

In tandem with the official negotiations, Musk would have to start making his case to shareholders, according to Karpoff, a task which has already begun — mainly by tweeting. 

“And I think his personal popularity among a lot of people will help them in that,” Karpoff said. 

“I wouldn’t be surprised if we even got a bunch of retail investors involved in struggling to acquire Twitter shares, and joining the attempt to pressure board members to strike a deal with Musk.”

CNN will shut down its new streaming service next week, just one month after launching it with much fanfare, the US network announced Thursday.

CNN+ was billed as one of the most significant developments in the television channel’s history but will close on April 30.

The decision was made by new management after CNN’s former parent company, WarnerMedia, merged with Discovery to form Warner Bros. Discovery earlier this month, CNN Business said.

“While today’s decision is incredibly difficult, it is the right one for the long-term success of CNN,” Chris Licht, the incoming president of CNN, wrote in a memo to staff, according to the New York Times.

“It allows us to refocus resources on the core products that drive our singular focus: further enhancing CNN’s journalism and its reputation as a global news leader.”

CNN+ was launched on March 29, with the network investing tens of millions of dollars in the venture and running an aggressive marketing campaign as it tried to break into America’s competitive streaming marketplace.

It had also lured talent from other networks including former Fox News anchor Chris Wallace.

Hundreds of CNN+ staff, many of whom had only just been hired, were told of the decision to close on Thursday.

The World Health Organization said Friday it “strongly recommended” Pfizer’s Covid-19 antiviral pill Paxlovid for patients with milder forms of the disease who were still at a high risk of hospitalisation.

However the UN agency warned it was “extremely concerned” that the inequality in access seen with Covid vaccines would again leave low- and middle-income countries “pushed to the end of the queue”.

US pharma giant Pfizer’s combination of nirmatrelvir and ritonavir was the “superior choice” of treatment for unvaccinated, elderly or immunocompromised people with Covid, the WHO’s experts said in the BMJ medical journal.

For the same patients, the WHO also made a “conditional (weak) recommendation” of the antiviral drug remdesivir made by US biotech firm Gilead — which it had previously recommended against.

The WHO recommended Paxlovid over remdesivir, as well as over Merck’s molnupiravir pill and monoclonal antibodies.

Pfizer’s oral treatment prevents hospitalisation more than the “available alternatives, has fewer concerns with respects to harms than molnupiravir, and is easier to administer than intravenous remdesivir and antibodies,” the WHO’s experts said.

The new recommendation was based on the findings of two trials involving almost 3,100 patients which showed that Paxlovid reduced the risk of hospital admission by 85 percent.

The trials also “suggested no important difference in mortality” and “little or no risk of adverse effects leading to drug discontinuation”. 

The recommendation applies to people over the age of 18, but not to pregnant or breastfeeding women.

It also does not apply to patients with a low risk of complications from the disease, because the benefit would be minimal.

The WHO’s experts also declined to give an opinion for patients with severe forms of the disease, due to a lack of data.

– Limitations and inequities –

The WHO stressed the limitations of such antiviral treatments. 

“The medicine can only be administered while the disease is at its early stages,” they said.

This means the patients must quickly test positive and be prescribed the pill by a doctor — all of which can pose obstacles for low- and middle-income countries, the WHO said.

Yet Covid pills have been seen as a potentially huge step in ending the pandemic as they can be taken at home, rather than in hospital.

Patients must start taking their Paxlovid pills within five days of the onset of symptoms — the course then lasts five days.

Remdesivir can be taken within seven days of symptoms setting in, but it is administered intravenously over three days.

– Questions about cost –

The WHO called on Pfizer to “make its pricing and deals more transparent” for Paxlovid.

Lisa Hedman, the WHO’s senior advisor on access to medicines, said that radio station NPR reported a full course of Paxlovid costs $530 in the United States. Another source unconfirmed by WHO gave the price of $250 in an upper-middle income country.

Remdesivir meanwhile costs $520, Hedman said, but generic versions made by companies in India sell for $53-$64. 

There is also a question mark over whether the virus could build resistance to these treatments.

But earlier this month Pfizer CEO Albert Bourla predicted a bright future for treatments like Paxlovid as people grow tired of getting further booster vaccinations.

Coming under fire for prioritising wealthy countries with its vaccine, Pfizer has agreed to allow some generic drugmakers around the world to make cheaper versions of Paxlovid under a UN-backed scheme. 

But on Friday the WHO “strongly recommended” that Pfizer let more generic manufacturers produce the drug and “make it available faster at affordable prices”.

Ivan Yuskevych used to export truckloads of edible snails from his Ukrainian farm to western Europe, but first coronavirus and now war have dashed production and emptied his restaurant.

As thousands of snails mated in a dark and humid room nearby, the former engineer recounted how he started the business with his wife in 2016 after tasting his first escargots on holiday in Greece.

“Before Covid, our farm produced 36 tonnes each season,” he said in a village outside the western city of Lviv, a rooster crowing in the background.

“We focused mainly on exports” to Italy, but also France and Spain, he said.

But with the coronavirus, “demand fell and so did prices, reducing our plan for Europe to zero”.

Yuskevych said they were just gearing up for a better season this year when Russia invaded in late February, sending the country’s economy into a tailspin.

Ukraine’s output is expected to shrink by 45 percent this year, the World Bank says.

The war has killed thousands of people, but also ravaged infrastructure, displaced millions from their homes, and drawn many men away from their jobs to the front.

– Snail caviar –

Agricultural exports decreased four-fold in March compared to February, the economy ministry has said, in a country famed for its wheat and sunflower oil.

In the relatively sheltered west of the country, authorities have called on businesses to reopen and make money to support the war effort.

But in the agrotourism section of his farm, Yuskevych said he was only planning to produce half the snails he had hoped for this year, and far less than in its heyday.

After his wife and son escaped abroad, he thought about halting production altogether.

Then he saw that staff from a sister farm in eastern Ukraine had fled their homes and wanted to work, and so he invited them to join him.

In the steamy room where his snails lay their spawn, it is now Iryna Yablinska’s job to delicately extract some of the white eggs from coconut peat, salt them, and turn them into caviar.

The rest will be relocated into polystyrene boxes to become larvae, and then into the garden to grow into fully-fledged adults.

Yablinska, her husband and two children — aged six and two — used to live in Kramatorsk close to the eastern front line, but fled on February 24 when they heard the first rockets.

– Chickens and war planes –

Today the farm may be empty of tourists, but at least the west of the country is more stable and her six-year-old is able to attend school online.

“We feel safe here,” she said.

In the garden, Yuskevych showed off a brood of black Silkie chickens, once a key attraction for visiting children. 

Like past diners in the restaurant, they too sometimes eat escargots, he said.

When he and his wife returned from Greece all those years ago, they discovered that people were foraging for snails in Ukraine, and sending them to Lithuania to be processed then sold in western Europe as a Lithuanian product, he said.

They thought they could cut out the middleman.

But it turned out the local variety was not really suitable for fine cuisine, so today their gastropods hail from North Africa.

As Yuskevych stood between his snail nursery and the chicken coops, a war plane flew low across the wintry April skyline.

He said planes and helicopters often dashed over the quiet village these days.

“Thank God they’re all Ukrainian,” he said.