Bitfarms implements fresh poison pill strategy to fend off Riot Platforms takeover bid
Bitfarms has introduced a new shareholder rights plan a so-called poison pill strategy to thwart Riot Platforms takeover attempt, according to a July 24 statement.
The miner intends to issue new shares to dilute stakes if any entity, including Riot Platforms, acquires over 20% of its shares within the next six months. The move still requires shareholder ratification and approval from the Toronto Stock Exchange.
The firms board of directors unanimously approved the plan on July 24, after the Ontario Capital Markets Tribunal ordered the firm to end its initial poison pill strategy, which was implemented in June.
In June, Bitfarms adopted a poison pill strategy that would lead to the issuance of new shares if an entity acquired more than 15% of its shares.
However, Riot which has purchased 14.9% of Bitfarms shares challenged the poison pill plan at the Ontario tribunal and won a ruling in its favor.
Riot CEO Jason Les welcomed the decision, saying:
The adoption of the off-market Poison Pill is yet another example of the broken corporate governance that plagues Bitfarms and of the ongoing attempts by the Bitfarms directors to entrench themselves. We appreciate that the Tribunal acted quickly and decisively to remove the Poison Pill.
Riot has also called a shareholder meeting to remove Bitfarms founder from the board.
Shareholders protection
According to Bitfarms, the new shareholder rights plan aims to ensure fair treatment of shareholders in any future acquisition attempts. The firm added that the plan also protects against creeping bids a situation where an entity accumulates a significant stake in its shares without a formal takeover bid.
Bitfarms further emphasized that the new plan is not a reaction to any specific acquisition proposal but seeks to ensure fair and equal treatment for all shareholders.
The development marks the latest in the ongoing takeover drama between Riot and Bitfarms. In May, Bitfarms rejected Riots $950 million acquisition bid and has since bolstered its board with the appointment of Fanny Philip and the elevation of Ben Gagnon to the CEO position.
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Text source: CryptoSlate
