Surge in Riot Platforms causes disruption
Bitfarms, a Bitcoin mining company based in Toronto, has implemented a shareholder rights plan to safeguard its strategic review process from potential takeover attempts by Riot Platforms.
In a press release on Jun. 10, Bitfarms announced that its board of directors unanimously approved the adoption of the rights plan to ensure the integrity of its strategic alternatives review process. This plan, often referred to as a “poison pill,” is aimed at protecting the interests of Bitfarms’ shareholders and preventing hostile takeover attempts.
The decision was made in response to recent actions by Riot Platforms, a Colorado-based Bitcoin mining company. Riot currently holds 47,830,440 common shares, representing 11.62% of Bitfarms’ shares, and has proposed to acquire all of Bitfarms’ issued and outstanding common shares for $950 million. Riot also announced its intention to requisition a special meeting of shareholders to bypass the review process.
Bitfarms’ special committee evaluated Riot’s offer and concluded that it undervalues the company and its growth prospects. While welcoming Riot’s interest, Bitfarms noted that Riot declined to participate in the strategic alternatives review process.
The Rights Plan establishes a 15% share accumulation threshold before being triggered, aiming to protect the strategic review process from immediate threats. Starting Jun. 20, one right will be issued per common share, becoming exercisable if any person, along with certain related persons, acquires 15% or more of the outstanding common shares before Sep. 10, or 20% thereafter, without adhering to the plan’s regulations.
The Rights Plan requires ratification by shareholders within six months and approval from the Toronto Stock Exchange, which could potentially delay acceptance until the relevant securities commission is satisfied.
For more information, Bitcoin miner Riot Platforms has acquired a 12% stake in Bitfarms.
