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Bitcoin Miner Bitfarms Counters Riot Platform’s Takeover Bid with “Poison Pill” Strategy

2 mins
Updated by Lynn Wang
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In Brief

  • Bitfarms implements a poison pill strategy amid Riot Platforms' takeover attempts.
  • The rights plan protects shareholders if an entity breaches share acquisition limits.
  • The plan requires approval from shareholders and the Toronto Stock Exchange.
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Bitcoin mining firm Bitfarms has implemented a shareholder rights plan to protect its shareholders’ interests amidst an unsolicited takeover bid from another Bitcoin miner—Riot Platforms.

This move follows Riot Platforms’ increased stake in Bitfarms and their offer to acquire all outstanding shares.

Bitfarms’ Strategic Defense Amid Hostile Takeover Attempts

Bitfarms’ strategy, known as a “poison pill,” aims to prevent hostile takeovers by making such deals prohibitively expensive for the acquirer. This tactic ensures Bitfarms can continue its strategic review process without disruption, exploring options like business combinations, strategic transactions, or a potential sale.

Read more: 5 Best Platforms To Buy Bitcoin Mining Stocks in 2024

“Riot’s actions, including a proposal received on April 22, 2024, and its subsequent market purchases to increase its stake, have been deemed to undervalue Bitfarms by the Special Committee of Independent Directors. This committee believes that Riot’s continued acquisition of shares disrupts the integrity of the strategic review process and could hinder maximizing shareholder value,” the company stated.

Effective June 20, 2024, the rights plan targets all new common shares and triggers if an entity acquires more than 15% of Bitfarms’ shares by September 10, 2024, or 20% after this date, without adhering to the plan. This rights plan enables Riot to make a compliant takeover offer under Canadian securities laws. It also protects existing shareholders, allowing them to buy additional shares at a discount if an acquirer breaches the specified thresholds.

The plan’s implementation depends on approval from both Bitfarms’ shareholders and the Toronto Stock Exchange. Currently, Riot’s bid is the only known takeover attempt.

BeInCrypto previously reported that Riot Platforms made an unsolicited $950 million offer in May to acquire Bitfarms. Riot privately offered $2.30 per share in cash and stock in April, about 20% above Bitfarms’ trading price before the offer. As of June 5, Riot currently owns 47,830,440 shares, approximately 11.62% of Bitfarms’ issued and outstanding stock.

Read more: Best Crypto Mining Stocks to Buy or Watch Now

Bitfarms (BITF) Price Performance.
BITF Price Performance. Source: Google Finance

Following the announcement of the rights plan, Bitfarms’ stock price (BITF) on the Nasdaq dropped 4.17% in the last 24 hours, while Riot Platforms’ (RIOT) stock price increased by 1.8%. Over the past 30 days, however, Bitfarms’ stock price rose by 44.65%, compared to Riot’s 4.16% gain.

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Lynn Wang
Lynn Wang is a seasoned journalist and content creator with over eight years of experience in digital marketing and cryptocurrency journalism. Her expertise lies in SEO strategy, blockchain technology, and Web3, where she has consistently delivered impactful content initiatives and engaged audiences effectively. Since January 2022, Lynn has been at the forefront of content and community efforts for BeInCrypto Indonesia. Under her leadership, the platform has witnessed remarkable growth,...