Canadian Tribunal Strikes Down Bitfarms’ Poison Pill Against Riot Platforms

cryptonews.com:

Bitcoin miner Riot Platforms said Wednesday that a Canadian tribunal terminated Bitfarms’ “poison pill” strategy to block its acquisition. It means Bitfarms can no longer use this tactic to prevent a hostile takeover.

The poison pill, which would have been activated if an entity bought 15% of Bitfarms’ shares, is now disabled.

“This ruling from the tribunal in favor of Riot’s application is a win for all Bitfarms shareholders,” Jason Les, Riot CEO, said in a statement. The approach shows Bitfarms’ flawed governance and the directors’ efforts to entrench themselves, he added.

However, Bitfarms has now implemented a second “poison pill” in response to the tribunal’s decision. This defensive measure will be activated if any entity accumulates more than 20% of Bitfarms’ shares without board approval.

It comes after Bitfarms rejected Riot’s $950m acquisition offer, arguing that it undervalued the company. To deter a hostile takeover, Bitfarms implemented a shareholder rights plan. Notably, Riot’s proposed acquisition valued Bitfarms at $2.30 per share. This represented a 24% premium over the recent average share price.

However, Bitfarms’ board of directors concluded that this offer was insufficient and not in the best interests of its shareholders.

Bitfarms’ defensive measures aimed to discourage hostile takeovers. It made it financially prohibitive for any entity to acquire more than 15% of the company’s shares without board approval. Specifically, the company aimed to protect its strategic review process and ensure that potential offers were subjected to evaluation.

Yet, Riot still intends to acquire Bitfarms.

Riot, holding a 14.9% stake in Bitfarms, recently launched a website highlighting corporate governance concerns at