Bitfarms Strikes Back with Shareholder Plan Amid Riot Takeover Tensions

Last Updated on June 11, 2024

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Person holding cellphone with logo of Riot Platforms Inc. on screen in front of webpage. Source: Timon -

Key Takeaways:

  • Bitfarms has adopted a “poison pill” plan to counter Riot Platforms’ hostile takeover attempt.
  • Riot Platforms increased its stake in Bitfarms from 3.61% to 11.62% after their takeover proposal was dismissed.
  • Bitfarms co-founder Emiliano Grodzki lost his board seat, while Riot aims to appoint more board members to bypass Bitfarms’ review process.

Bitfarms has implemented a shareholder rights plan following its Annual General and Special Meeting to counter Riot Platforms’ hostile takeover attempt.

This plan, often known as a “poison pill“, allows other shareholders to buy additional shares at a discount if any individual or group acquires 15% of Bitfarms’ shares by September 20 and then increases their holdings to 20% without board approval.

This measure complicates but does not prevent a takeover by diluting the bidder’s shares.

Riot Platforms claims that Bitfarms’ board dismissed its takeover proposal in April without significant discussion, while Bitfarms argues the offer undervalued the company.

Riot responded by purchasing shares on the open market, increasing its stake from 3.61% to 11.62% by the shareholders meeting.

Bitfarms co-founder Emiliano Grodzki lost his board seat in the recent election, with Riot questioning the independence and actions of Grodzki and Nicholas Bonta, the latter of whom was reelected as board chair.

Riot has plans to call an additional shareholders meeting to appoint more board members, which Bitfarms describes as an effort to bypass its board’s review process.

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