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Bitfarms Adopts ‘Poison Pill’ After Riot Takeover Offer Turns Hostile

Benjamin Taubman
·1 min read

(Bloomberg) -- Bitcoin mining company Bitfarms Ltd. is adopting a “poison pill” shareholder rights plan as a defense after an unsolicited takeover offer by larger rival Riot Platforms Inc.

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A poison pill strategy is a measure used to prevent corporate takeovers by making a deal too expensive for the acquiring company. Under terms of the plan, if an entity acquires an equity stake of more than 15% by Sept. 10, Bitfarms will issue new stock to prior existing shareholders, diluting the stake of the entity pursuing a hostile takeover, Bitfarms said in a statement Monday.

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Riot Platforms made an unsolicited, $950 million offer in May to buy Bitfarms Ltd. after the smaller Bitcoin miner rebuffed its takeover approach the prior month. Bitfarms said its board had determined that the proposal “significantly undervalues” the company and its growth prospects.

Back in April, Riot privately offered $2.30 a share in cash and stock for Bitfarms, which was about 20% above what the company’s shares traded for before the offer was made.

Riot beneficially owned 47,830,440 shares of Bitfarms, representing approximately 12% of the issued and outstanding stock, the company said in a statement June 5. A Riot spokesperson didn’t immediately return requests for comment.

Shares of Bitfarms fell 4.2% to $2.30, while Riot increased 1.8% to $9.90 on Monday. So far this year, the stocks have slumped around 21% and 36%, respectively.

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