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Bitfarms Adopts “Poison Pill” in Riot Platforms Takeover Attempt
Bitfarms has adopted a shareholder rights plan to protect its strategic review process from takeover attempts by Riot Platforms.
Bitfarmbased in Toronto Bitcoin mining company, announced in a press release dated June 10 that its board of directors unanimously approved the adoption of a shareholder rights plan to safeguard the integrity of the strategic alternatives review process.
The Rights Plan (commonly referred to as the “poison pill”) aims to protect the interests of Bitfarms shareholders by preventing any potential hostile takeover attempts. The move comes in response to recent actions by Riot control platformsa Bitcoin mining company based in Colorado.
“The Rights Plan was adopted to preserve the integrity of our previously announced strategic alternatives review process and is in the best interests of all Bitfarms shareholders.”
Bitfarm
Riot, which currently holds 47,830,440 common shares, representing 11.62% of Bitfarms shares, recently made a proposal to acquire all of Bitfarms’ issued and outstanding common shares for $950 million and announced its intention to request a special meeting of shareholders to bypass the review process.
In response, Bitfarms’ special committee determined that Bitfarms’ offer “significantly undervalues the company and its growth prospects.” The Toronto-based company added that while the special committee welcomed Riot’s interest in the company, Riot declined to participate in the strategic alternatives review process.
“[…] [Riot] instead continued to acquire common shares of the company on the open market, thereby acquiring an additional 8.01% of the company’s common shares from April 22, 2024, in an attempt to undermine the integrity of the process and thwart third-party interest. “
Bitfarm
The Rights Plan sets a threshold of 15% stock accumulation prior to activation, designed to prevent any immediate threat to the strategic review process. Effective June 20, one right will be issued for each common share, which will become exercisable if a person, together with certain related persons, acquires 15% or more of the outstanding common shares before September 10, or 20% thereafter, without following the terms of the plan. rules.
The Rights Plan must be ratified by shareholders within six months and must be approved by the Toronto Stock Exchange, which may also delay acceptance until the relevant securities commission is satisfied.