Key Takeaways:
- Riot Platforms acquired a 13.1% stake in Bitfarms for over $111 million amidst a takeover attempt.
- Bitfarms adopted a “poison pill” strategy to prevent Riot from acquiring a 15% or larger stake.
- Riot’s CEO Jason Les criticized Bitfarms’ defense tactic, while Bitfarms insists it complies with Canadian securities laws.
Riot Platforms has acquired a 13.1% stake in Bitfarms, purchasing around six million common shares valued at over $111 million.
This acquisition comes amidst Riot’s takeover attempt, which Bitfarms is trying to thwart using a “poison pill” strategy introduced on June 10.
Riot Comments on Bitfarms’ Adoption of Shareholder-Unfriendly Poison Pill
— Riot Platforms, Inc. (@RiotPlatforms) June 12, 2024
Poison Pill Comes Just Days After Riot Privately Urged Bitfarms to Consult with Riot and Other Large Shareholders on New Board Members and Stressed that Chairman Nicolas Bonta Must Resign to Address…
This strategy aims to prevent Riot from acquiring a 15% or larger stake by diluting the value of its shares.
Riot CEO Jason Les criticized Bitfarms’ defense tactic for setting the threshold at 15% instead of the typical 20%, claiming it conflicts with legal and governance standards.
Bitfarms maintains that its plan aligns with Canadian securities laws.
Riot had previously offered to buy Bitfarms for $950 million, a 24% premium over its one-month volume-weighted average share price.
Bitfarms’ stock price on the Nasdaq has surged over 56% in the past 30 days due to the takeover plans.
Additionally, Bitfarms’ former CEO, Geoffrey Morphy, resigned in May after suing the company, with Nicolas Bonta stepping in as interim president and CEO.
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
Les has called for Bonta’s removal, citing poor corporate governance.
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