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.
Bitcoin mining company Bitfarms is adopting a “poison pill” shareholder rights plan as a defense after an unsolicited takeover offer by larger rival Riot Platforms https://t.co/LHCuezATt8
— Bloomberg Crypto (@crypto) June 10, 2024
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.
Bitfarms Approves "Poison Pill" Against Riot Platforms Takeover
— Metaverse Post (@mpost_io) June 10, 2024
The board of directors of mining company @Bitfarms_io has adopted a shareholder rights plan following a purchase proposal by competitor @RiotPlatforms.
This initiative, known in practice as a "poison pill," aims to… pic.twitter.com/bcy9fUQwts
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.
Bitfarms to adopt 'poison pill' amid Riot takeover attempt https://t.co/7aQYvY19lW pic.twitter.com/NgdL69JQA3
— Reuters Business (@ReutersBiz) June 10, 2024
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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