Bitfarms adopts ‘poison pill’ shareholder rights plan amid hostile takeover attempts


Bitcoin
miner

Bitfarms
announced
that
its
Board
of
Directors
has
unanimously
approved
a
shareholder
rights
plan

effective
immediately

to
preserve
the
integrity
of
its
strategic
alternatives
review
process.

The
plan,
also
known
as
a
“poison
pill,”
is
designed
to
prevent
any
party
from
gaining
control
of
Bitfarms
without
providing
fair
value
to
all
shareholders.

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The
move
comes
after
Bitfarms
rejected

Riot
Platforms‘
unsolicited
takeover
bid,
which
offered
to
acquire
the
miner
for
$950
million.

“Poison
pill”

Under
the
Rights
Plan,
one
right
will
be
issued
for
each
common
share
outstanding
as
of
June
20.
These
rights
will
become
exercisable
if
any
person
or
entity
acquires
15%
or
more
of
Bitfarms’
outstanding
common
shares
without
complying
with
the
plan’s
“Permitted
Bid”
provisions.

Permitted
Bids
must
be
made
to
all
shareholders,
remain
open
for
105
days,
and
meet
other
specific
conditions. The
Rights
Plan
is
effective
immediately
but
requires
shareholder
ratification
within
six
months.

Bitfarms
also
announced
that
it
has
been
notified
by
the
Toronto
Stock
Exchange
(TSX)
that
the
TSX
will
defer
its
consideration
of
the
Rights
Plan
until
it
is
satisfied
that
the
appropriate
securities
commission
will
not
intervene

A
deferral
of
the
TSX’s
acceptance
of
the
Rights
Plan
does
not
affect
its
adoption
or
operation.
Unless
terminated
earlier,
the
Rights
Plan
will
remain
operative
and
effective
for
a
minimum
of
six
months
from
June
10,
the
date
of
adoption.

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Unsolicited
takeover
bid

The
move
comes
in
response
to
Riot
Platforms’

which
now
holds
an
11.62%
stake
in
Bitfarms
—unsolicited
proposal
to
acquire
all
outstanding
shares.

Riot
initially
made
the
offer
to
acquire
Bitfarms
on
April
22,
when
it
held
3.61%
of
the
company’s
voting
shares.
The
company
said
its
offer
was
prompted
by
a
belief
that
the
board
was

not
acting
in
the
best
interest
of
shareholders.

After
evaluating
the
proposal,
Bitfarms’
Special
Committee
of
independent
directors
concluded
that
Riot’s
offer
significantly
undervalued
the
company.

Despite
welcoming
Riot’s
interest
and
agreeing
to
a
standstill
term,
Riot
continued
to
purchase
shares,
increasing
its
stake
by
an
additional
8.01%.

The
Special
Committee
believes
the
adoption
of
the
Rights
Plan
is
crucial
to
ensuring
Bitfarms’
Board
has
sufficient
time
to
explore
and
negotiate
alternatives
that
could
deliver
the
best
value
for
shareholders.

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The
plan
aims
to
protect
the
strategic
review
process
from
being
disrupted
by
further
share
accumulation
by
Riot,
particularly
beyond
a
15%
threshold
in
the
short
term.

Mentioned
in
this
article
Posted
In:

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Author: Assad Jafri


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