tl;dr
Bitcoin miner Bitfarms has implemented a "poison pill" strategy to prevent a potential takeover from competitor Riot Platforms. The shareholder rights plan aims to deter unsolicited takeovers and reduce the company's appeal. Bitfarms will issue new shares if an entity acquires over 15% of its stake ...
Bitcoin miner Bitfarms is implementing a "poison pill" strategy to thwart a potential takeover from competitor Riot Platforms. This shareholder rights plan aims to deter unsolicited takeovers and reduce the company's appeal. Riot Platforms has been steadily amassing a 12% stake in Bitfarms with ambitions to form one of the world's largest bitcoin mining entities.
Under Bitfarms' plan, if an entity acquires over 15% of Bitfarms' stake between June 20 and September 10, the company will issue new shares, thus diluting the entity's stake. After September 10, the threshold will be relaxed to 20% under certain conditions for any takeover attempt. The board of directors approved this plan, citing the preservation of the integrity of a previously announced strategic review process and the best interests of shareholders.
A shareholder rights plan, also known as a "poison pill," is a defense mechanism against unsolicited takeovers, aiming to diminish the desirability of the company or dilute the acquirer's ownership. Bitfarms had previously rebuffed a nearly $1 billion acquisition offer from Riot Platforms in April. The proposed deal sought to purchase Bitfarms' outstanding shares at $2.30 each, representing a 24% premium on the one-month weighted average per share. Bitfarms deemed this offer undervaluing the company.
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