Twitter's board of directors on Friday unanimously adopted a shareholder rights plan to fend off Elon Musk's unsolicited$43 billion bid to take the company private. The plan, which is valid for one year, will kick in if Musk or anyone else acquires 15% or more of Twitter's outstanding common stock in a transaction not approved by the board. 

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Often referred to as a "poison pill," a shareholder rights plan offers companies a way to discourage a hostile takeover by another company or activist investor. Once the activist investor reaches a certain level of stock ownership (in this case, 15%), other shareholders are welcome to purchase stock at a discounted price, thereby diluting the activist buyer's stake.

Should Musk or anyone acquire more than 15% of Twitter stock, other stakeholders will be able to purchase additional shares at half the price. 

"The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter," Twitter said in a release. "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 plan does not prevent Twitter's board from accepting an acquisition proposal if it believes it's in the best interests of Twitter and its shareholders.

Twitter noted that other publicly held companies have adopted similar plans in comparable circumstances. Netflix, for instance, adopted a shareholder rights plan in 2012 after investor Carl Icahn acquired a 10% stake in the company.

More:

• No, Elon, Twitter will never be a platform for 'Free Speech'  
  
• Elon Musk explains what he wants to change about Twitter   
  
• Elon Musk offers to buy Twitter for$43 billion and take it private

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