The offer is extended to existing shareholders.
So if you own 10 stocks you will be allowed to purchase 10 more stocks at a vastly reduced cost.
Something like that.
This way you can screw over the corporate raider without screwing over existing stock holders.
"Another, perhaps more practical provision of the pill says that the board can just exchange each right for one share of stock, for free, meaning in essence that the board can double everyone else’s number of shares of Twitter while holding Musk’s constant, without asking anyone to put in more money." (From a recent Money Stuff.)
It also gives reasons why poison pills were allowed by the Delaware Supreme Court (and not the SEC).
This seems to be the root problem, and it can happen in other scenarios when a coalition controls 51% of the shares. The law needs to protect the minority shareholders.
This poison pill “solution” is just theft.