Poison Pill: Bitfarms Defends Shareholder Rights Plan Amid Riot’s Accusations

TLDR

• Riot Platforms claims the “poison pill” adopted by Bitfarms to protect itself from takeover attempts is in conflict with legal and governance standards.
• Riot will continue to address the “serious corporate governance issues” at Bitfarms despite the recently adopted “poison pill.”
• Bitfarms defended its decision, stating that the shareholder rights plan was unanimously approved by the board to preserve the integrity of its strategic alternatives review process.
• Riot Platforms currently holds 13.1% of Bitfarms’ shares and recently signaled its intention to acquire all of Bitfarms’ issued and outstanding common shares for $950 million.
• Bitfarms believes Riot’s interests are not aligned with those of its shareholders and that Riot is attacking its board and corporate governance to push its “low-ball bid.”

The ongoing battle for control between Bitcoin mining companies Riot Platforms and Bitfarms has intensified, with Riot claiming that Bitfarms’ recently adopted “poison pill” conflicts with established legal and governance standards.

The shareholder rights plan, commonly known as a “poison pill,” was implemented by Bitfarms to protect itself from takeover attempts, particularly from Riot Platforms.

In a press release on June 12, 2024, Riot Platforms stated that the decision made by Bitfarms is “further evidence of the Bitfarms board of directors disregarding good corporate governance.”

The Colorado-based company pledged to continue addressing the “serious corporate governance issues” at Bitfarms, despite the adoption of the “poison pill.”

#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

Riot Platforms CEO Jason Les emphasized the company’s commitment to ensuring that Bitfarms’ shareholders have a say in the company’s future direction.

Les also highlighted the recent decision by Bitfarms’ board to vote out the company’s co-founder Emiliano Grodzki, less than two weeks ago, as an indication of internal discontent.

In response to Riot’s accusations, Bitfarms defended its decision to adopt the shareholder rights plan.

The Canadian Bitcoin mining firm asserted that the plan was unanimously approved by the board to “preserve the integrity” of its strategic alternatives review process and is “in the best interests of all Bitfarms’ shareholders.”

The dispute between the two companies began when Riot Platforms, which currently holds 47,830,440 common shares, representing 13.1% of Bitfarms’ shares, signaled its intention to acquire all of Bitfarms’ issued and outstanding common shares for $950 million.

Under the “poison pill” plan, Bitfarms would issue additional shares to dilute an investor’s stake if an entity aims to hold 15% or more of the firm’s shares.

Bitfarms believes that Riot’s interests are not aligned with those of its shareholders and accused the company of attempting to undermine the integrity of the acquisition process.

The Canadian firm stated that Riot is “attacking Bitfarms’ Board and corporate governance in an effort to push its low-ball bid and disrupt the Strategic Alternatives Review Process.”

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