Bitfarms Adopts "Poison Pill" To Prevent Takeover By Riot Platforms

Bitfarm's Bitcoin mining installation (photo: x @Bitfarms_io)

JAKARTA - Bitcoin miner Bitfarms announced on Monday 10 June that it had approved the adoption of a "poison election" plan to prevent a forced takeover attempt by its rival Riot Platforms.

The move comes days after Riot Platforms revealed that it has built a 12% stake in Bitfarms as part of a takeover attempt.

Riot initially made a personal proposal to buy Bitfarms in April. The proposal was rejected by the Bitfarms board after concluding that the offer "significantly underestimated" the company's value.

In May, Colorado-based Riot publicly submitted a proposal to buy the bitcoin miner for about $950 million and expressed his intention to ask for a special shareholder meeting to add an independent director to the Bitfarms board.

US-listed Bitfarms shares fell 2.5% in trading before the market.

According to Bitfarms' plan, if an entity raises more than 15% of Bitfarms' shares from June 20 to September 10, the company will issue new shares, which will reduce ownership of the entity.

After September 10, this threshold will be relaxed to 20% as long as every takeover effort meets certain conditions.

The shareholder rights plan, known as the "poison election," was used by the company's board to thwart an offer of forced takeover.

Bitfarms said that the shareholder's rights plan aims to maintain the integrity of the previously announced strategic alternative review process.

The bitcoin miner began conducting a strategic alternative review last month after receiving a proposal from Riot. This review includes the company's possible merger or sale.

"The rights plan must be ratified by shareholders within six months of its adoption, otherwise the plan will end," Bitfarms said.