Bitfarms Undertake The Poison Pill to Lay off Riot Platforms Bid

Bitfarms has taken intense measures to stop Riots Platform’s takeover attempt. Its latest poison pill strategy, announced on July 24, is in deference to Riot platforms’ takeover. 

The mining firm said it will issue new shares to dilute stakes, thereby protecting its shareholders’ rights and frustrating the efforts of entities from creeping bids.

The Bitfarm share sales can only proceed with the Toronto Stock Exchange’s vetting and the shareholders’ consent. 

Tribunal Thwarts New Poison Pill Tactic 

Fortunately, the board of directors voted to sell additional shares after the Ontario Capital Markets Tribunal commanded an end to the poison pill. The digital asset Bitfarm had implemented the move to sell more shares if any entity acquires over 15% of its shares in June. 

However, Riot challenged Bitfarms’s Poison pill tactic after buying 14.9% of shares. Riot presented its preposition against Bitfarms at the Ontario Capital Tribunal and won the case.

According to Riot CEO Jason Les, the poison pill tactic was a way for Bitfarms directors to imbed themselves. He thanked the tribunal for acting swiftly in ending the poison pill. 

Bitfarms Defends its Shareholders’ Rights Plan

Bitfarm adopted the Shareholder rights plan on June 10. The mining firm said the shareholders’ rights ensure they are treated relatively during future acquisitions. It added that the initiative will guard against unofficial takeover bids.

#Bitfarms Issues Statement re: Riot’s Comments & Actions

• Board is committed to maximizing shareholder value & continues to welcome Riot in strategic alternatives review
• Shareholder Rights Plan preserves integrity of process
• Riot’s interests are not aligned with BITF…

— Bitfarms (@Bitfarms_io) June 13, 2024

Furthermore, Bitfarms says the new shareholder rights have nothing to do with a specific acquisition. The firm said it is a preliminary approach to secure shareholders’ future. 

Meanwhile, on June 24, Riot officially asked for a meeting with Bitfarms shareholders to discuss the removal of CEO Nicolas Bonta. 

Riot solicited the replacement of Nicolas Bonta with Ben Gagnon as Bitfarms CEO. For now, shareholders’ votes will decide the fate of Bitfarms’ founder. 

According to Riot, the move must hasten specific negotiations with the board. Riot is also bidding to replace members of the Bitfarms board with Amy Freedman, John Delaney, and Ralph Goehring. 

Riot said it would not compensate persons nominated to the Bitfarms board. It also said the current Bitfarms board gives preference to its directors rather than the overall good of the organization. 

In April, Riot attempted to buy Bitfarms for about $950 million. However, its purchase plan was thwarted as Bitfarms resisted the offer, stating it was underpriced.  

Riot acquired Bitfarms stock until it became the majority shareholder with mining stakes of 14.9%. For now, Riot is holding off on its acquisition of Bitfarms until a new board emerges. It has also shelved its earlier proposition of $2.30 a share. 

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