Bitfarms, a Toronto-based Bitcoin mining company, 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, also known as a “poison pill”, to protect the interests of its shareholders. This decision was made in response to recent actions by Riot Platforms, a Bitcoin mining company based in Colorado.
Riot Platforms, which currently holds 11.62% of Bitfarms’ shares, has proposed to acquire all of Bitfarms’ common shares for $950 million and has expressed its intention to call a special meeting of shareholders to bypass the review process.
In light of this, Bitfarms’ special committee has concluded that Riot’s offer undervalues the company and its potential for growth. While the committee appreciated Riot’s interest, Riot chose not to participate in the strategic review process.
The Rights Plan establishes a threshold of 15% share accumulation before being triggered, aiming to prevent any immediate threats to the review process. Beginning on Jun. 20, one right will be issued per common share, becoming exercisable if any person, and certain related persons, acquire 15% or more of the outstanding common shares before Sep. 10, or 20% thereafter, without adhering to the plan’s regulations.
The approval of the Rights Plan by shareholders and the Toronto Stock Exchange is required within six months, with potential delays until the relevant securities commission is satisfied.
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Bitcoin miner Riot Platforms acquires 12% stake in Bitfarms.