Bitfarms, a Bitcoin mining company, has recently implemented a new strategy called a poison pill to protect itself from a potential takeover bid by Riot Platforms. This poison pill strategy involves issuing new shares to dilute the stakes of any entity, including Riot Platforms, that acquires more than 20% of Bitfarms’ shares within the next six months.
This decision comes after a previous poison pill strategy, which would have been triggered if an entity acquired more than 15% of Bitfarms’ shares, was challenged and overturned by Riot Platforms at the Ontario Capital Markets Tribunal. Riot Platforms, which currently owns 14.9% of Bitfarms’ shares, has been actively trying to acquire the company and remove its founder from the board.
Bitfarms’ board of directors unanimously approved the new poison pill strategy on July 24, emphasizing that it is meant to protect the interests of shareholders and prevent any unfair acquisition attempts. The company clarified that the strategy is not in response to any specific acquisition proposal but is a proactive measure to ensure equal treatment for all shareholders.
This move is the latest development in the ongoing battle between Bitfarms and Riot Platforms. In May, Bitfarms rejected a $950 million acquisition bid from Riot Platforms and has since strengthened its board with new appointments.
Overall, Bitfarms’ decision to implement a poison pill strategy reflects its commitment to protecting shareholder interests and maintaining control over its future amid takeover attempts. This proactive approach demonstrates the company’s dedication to ensuring fair treatment for all shareholders and defending against potential hostile acquisition bids.