Bitfarms Adopt 'Poison Pill' Strategy to Fend Off Hostile Takeover by Riot Platforms (UPDATED)
Bitcoin miner Bitfarms announced on Monday that it has adopted of a "poison pill" strategy to guard against a potential hostile takeover by rival Riot Platforms. This move aims to maintain the integrity of its previously announced strategic alternatives review process, the firm said.
- Shareholder rights plans, commonly known as "poison pills," are used by corporate boards to prevent hostile takeover attempts.
- According to Bitfarms' statement, the plan will be activated if any entity acquires more than a 15% equity stake by September 10.
- This mechanism will result in the issuance of new stock to existing shareholders before that date, diluting the position of the potential acquirer. The goal is to make a hostile takeover prohibitively expensive for Riot Platforms, which currently holds a 12% stake in Bitfarms.
- The decision follows Riot Platforms' recent disclosure that it has acquired a 12% stake in Bitfarms, as well as a rejected $950 million acquisition offer.
"We have attempted to privately engage with the Bitfarms Board and recently sent two letters urging constructive collaboration with us around the addition of at least two new directors who are fully independent of Bitfarms and Riot. Instead of engaging with us privately and in good faith, Bitfarms has responded by implementing an off-market Poison Pill with a trigger well below the customary 20% threshold," said Jason Les, Chief Executive Officer of Riot, in response.
- "This action further demonstrates the Bitfarms Board’s entrenchment and disregard for the perspectives of its shareholders, who clearly signaled their discontent less than two weeks ago when they voted out Company co-founder Emiliano Grodzki. We will continue to push to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say on the Company’s path forward," added Les.
Press Release / Archive
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Riot's Response / Archive
