- Ontario Capital Markets Tribunal terminated Bitfarms’ (TSX:BITF) Poison Pill to prevent Riot Platforms (NDAQ:RIOT) from having a controlling stake
- Bitfarms announced a new shareholder rights plan intending to ensure that all of its shareholders are treated fairly and equally in connection with any unsolicited take-over bid
- After turning down Riot’s unsolicited C$1.3 billion takeover bid, Bitfarms was reportedly evaluating offers under the Poison Pill strategy, to prevent Riot from gaining a controlling interest
- Riot Platforms Inc. last traded at C$15.66 per share and Bitfarms Ltd. last traded at C$3.61 per share
Ontario Capital Markets Tribunal terminated Bitfarms’ (TSX:BITF) Poison Pill to prevent Riot Platforms (NDAQ:RIOT) from having a controlling stake.
The tribunal issued a cease trade order to the global Bitcoin miner, which contemplated a 15 per cent trigger – effective immediately.
Riot Platforms’ take
“This ruling from the tribunal in favour of Riot’s application is a win for all Bitfarms shareholders,” Riot’s chief executive officer Jason Les said in a media release. “The adoption of the off-market Poison Pill is yet another example of the broken corporate governance that plagues Bitfarms and of the ongoing attempts by the Bitfarms directors to entrench themselves. We appreciate that the tribunal acted quickly and decisively to remove the Poison Pill.”
Bitfarms’ response
In a response to this ruling, Bitfarms announced a new shareholder rights plan intending to ensure, to the extent possible, that all of its shareholders are treated fairly and equally in connection with any unsolicited take-over bid.
“The rights plan was put in place to preserve the integrity of the independent Special Committee’s strategic alternatives review process in light of attempts by Riot to opportunistically acquire the company,” Brian Howlett, lead director of Bitfarms’ board of directors explained in a statement from the company. “In light of this decision, the Bitfarms board has adopted the new rights plan to ensure the interests of all shareholders are protected.”
While the plan was formed to protect against “creeping bids,” Bitfarms emphasized that it was not being adopted in response to any specific proposal to acquire control of the company.
A bitter pill to swallow
After turning down Riot’s unsolicited C$1.3 billion takeover bid of its Bitcoin mining rival, Bitfarms had reportedly received numerous other offers of interest. The company was evaluating said offers under the Poison Pill strategy, designed to prevent Riot and other shareholders from gaining a controlling interest.
During this period, both companies had engaged in intense exchanges. Riot accused Bitfarms’ board of having a flawed corporate governance structure, while Bitfarms responded by highlighting Riot’s relatively higher governance risk rating from Institutional Shareholder Services and its low score of 0.4 out of 10 in board accountability from Glass Lewis & Co.
About Riot and Bitfarms
Riot Platforms Inc. is a Bitcoin mining and digital infrastructure company with operations in central Texas and electrical switchgear engineering and fabrication operations in Denver, Colorado.
Bitfarms Ltd., established in 2017, is a global Bitcoin mining company that operates 12 facilities across Canada, the United States, Paraguay and Argentina.
Riot Platforms Inc. (NDAQ:RIOT) last traded at C$15.66 per share and Bitfarms Ltd. (TSX:BITF) last traded at C$3.61 per share.
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(Top photo: Bitfarms Ltd.)
