Bitfarms adopts ‘poison pill’ amid Riot Platforms’ takeover attempt

Bitfarms adopted a shareholder rights plan to protect its strategic review process from takeover attempts by Riot Platforms.

Bitfarms, a Toronto-based Bitcoin mining company, announced in a June 10 press release that its board of directors unanimously approved the adoption of a shareholder rights plan to protect the integrity of the strategic alternative review process.

The Rights Plan (often referred to as the “poison pill”) aims to protect the interests of Bitfarms shareholders by preventing possible hostile takeover attempts. The move comes in response to recent actions by Riot Platforms, a Bitcoin mining company based in Colorado.

“The Rights Plan is being adopted to protect the integrity of our previously announced review of strategic alternatives and is in the interest of all Bitfarms shareholders.”

Bitfarms

Riot, which currently owns 47,830,440 common shares representing 11.62% of Bitfarms shares, recently made an offer to acquire all of Bitfarms’ issued and outstanding common shares for $950 million and will call a special shareholders’ meeting to get through the situation. announced his intention to request. review process.

In response, Bitfarms’ special committee determined that Bitfarms’ offer “significantly underestimates the company and its growth prospects.” The Toronto-based firm added that although the special committee welcomed Riot’s interest in the company, Riot declined to participate in the process of examining strategic alternatives.

“[…] [Riot] Instead, with the aim of undermining the integrity of the process and hindering the interests of third parties, it continued to purchase the company’s common shares in the open market, acquiring a further 8.01% of the company’s common shares since April 22, 2024. ”

Bitfarms

The Rights Plan sets a 15% equity accumulation threshold before triggering, which is designed to prevent any immediate threat to the strategic review process. Beginning June 20, one right will vest per common share, which will vest if any person, together with certain related persons, acquires 15% or more of the outstanding common shares before September 10, or 20% thereafter, without complying with the rules of the plan. will be. Charter.

The Rights Plan must be approved by shareholders within six months and approved by the Toronto Stock Exchange; This may result in a delay in acceptance until the relevant securities commission is satisfied.