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A Canadian tribunal has put an end to bitcoin mining firm Bitfarm’s defensive “poison pill” strategy, aimed at blocking a takeover attempt by rival firm Riot Platforms. On July 24 the Ontario Capital Markets Tribunal <a href="https://finance.yahoo.com/news/riot-announces-ontario-capital-markets-232500022.html" rel="noopener noreferrer nofollow">issued</a> a cease trade order, therefore instantly ending Bitfarms’ scheme.
<h2 id="span-style-font-weight-400-background-span">Background</h2>
Bitfarms, a significant player in the Bitcoin mining industry, operates 12 mining facilities across four countries: Canada, the United States, Paraguay, and Argentina. Recently, the firm has had internal difficulties including the departure of its former CEO Geoffrey Morphy. Morphy resigned in May and later sued the company.
The very same month, Riot Platforms made a bid of $950 million to buy Bitfarms Ltd. The latter called this attempt by Riot, which already holds a 14% stake in Bitfarms, a “hostile takeover.”
Riot Platforms continued to purchase Bitfarms shares in the open market. Bitfarms responded by implementing a poison pill plan meant to stop Riot from acquiring a controlling share. Businesses sometimes use this approach to prevent hostile takeovers, allowing <a href="https://thecoinrise.com/bitfarms-bolsters-board-amid-hostile-takeover-threat-from-riot-platforms/" rel="noopener noreferrer nofollow">current board members to purchase</a> extra shares at a big discount therefore diluting the acquirer’s ownership.
<h2 id="span-style-font-weight-400-a-stop-on-bitfarms-plan-span">A Stop on Bitfarms’ Plan</h2>
Bitfarms’ plan stated that if any entity acquired more than 15% of the company’s outstanding shares before September 10, new shares would be issued to other existing shareholders, thereby diluting the acquiring entity’s ownership. However, this strategy was brought to an abrupt halt by the tribunal’s ruling in favor of Riot’s application to cease trade in the poison pill plan.
“This ruling from the Tribunal in favor of Riot’s application is a win for all Bitfarms shareholders,” said Jason Les, CEO of Riot Platforms, in a statement. Les criticized Bitfarms’ adoption of the poison pill, describing it as a symptom of the “broken corporate governance” within Bitfarms and an attempt by its directors to entrench themselves.
<h2 id="span-style-font-weight-400-a-new-poison-pill-span">A New Poison Pill</h2>
Riot Platforms is now pushing for significant changes in Bitfarms’ governance, advocating for the election of its three director nominees, John Delaney, Amy Freedman, and Ralph Goehring, to Bitfarms’ board at the next shareholder meeting scheduled for October 29.
In contrast, Bitfarms’ lead director Brian Howlett defended the rights plan, stating it aimed to “preserve the integrity” of alternative takeover processes amidst Riot’s opportunistic purchase attempt. Following the tribunal’s decision, Howlett announced that Bitfarms has adopted a new Poison Pill to protect the interests of all shareholders.
Notably, despite the ongoing struggle, <a href="https://thecoinrise.com/bitfarms-boosts-bitcoin-production-amid-takeover-attempts-by-riot-platforms/" rel="noopener noreferrer nofollow">Bitfarms reported that it produced 21% more Bitcoin</a> in June. The company currently has 905 BTC in its treasury, worth around $57 million.
The post <a href="https://thecoinrise.com/canadian-tribunal-blocks-bitfarms-poison-pill-plan-amid-riots-takeover-bid/" rel="noopener noreferrer nofollow">Canadian Tribunal Blocks Bitfarms’ Poison Pill Plan Amid Riot’s Takeover Bid</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

Canadian Tribunal Blocks Bitfarms’ Poison Pill Plan Amid Riot’s Takeover Bid

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TheCoinrise Media

Další články publikované 25. 7. 2024

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