Bitfarms Adopts Shareholder Rights Plan Amid Riot Platforms’ Takeover Attempt
Bitfarms Ltd. (Nasdaq/TSX: BITF), a global Bitcoin mining company, has taken a strategic step by implementing a shareholder rights plan in response to an unsolicited takeover bid from Riot Platforms, Inc. This move is aimed at safeguarding the interests of Bitfarms’ shareholders and ensuring a fair process.
Shareholder Rights Plan Implementation
- The Board of Directors of Bitfarms approved the adoption of the shareholder rights plan (“Rights Plan”) on June 10, 2024, to protect the integrity of the company’s strategic review process.
- A special committee of independent directors is currently evaluating various options, including executing the current business plan, a business combination, or a potential company sale.
Riot Platforms’ Increasing Stake
- Riot Platforms has been actively acquiring shares of Bitfarms, currently holding 11.62% of the company’s outstanding voting securities, raising concerns among Bitfarms’ board members.
- Despite an initial proposal rejected by Bitfarms for undervaluing the company, Riot has continued to purchase additional shares.
Bitfarms’ Response to Riot’s Actions
- The adoption of the Rights Plan aims to provide the board with sufficient time to explore alternative strategies that could deliver better value for shareholders.
- The plan prevents any shareholder from acquiring 15% or more of Bitfarms’ common shares without triggering rights, allowing other shareholders to purchase more shares at a discounted rate.
Implementation Details of the Rights Plan
- Each outstanding common share of Bitfarms will receive one right on June 20, 2024.
- The rights become exercisable if any individual or group acquires 15% or more of Bitfarms’ common shares before September 10, 2024, or 20% thereafter.
About Bitfarms Ltd.
- Established in 2017, Bitfarms is a global Bitcoin mining company operating 12 mining facilities across Canada, the United States, Paraguay, and Argentina.
- The company focuses on sustainable energy practices, utilizing hydro-electric power to minimize environmental impact.
Hot Take: Protecting Shareholder Interests in the Face of Hostile Takeover
As Bitfarms implements a shareholder rights plan to counter Riot Platforms’ aggressive takeover attempt, the company demonstrates its commitment to safeguarding shareholder interests and ensuring a fair evaluation process. By taking proactive measures to explore strategic alternatives and maximize shareholder value, Bitfarms maintains control over its future direction amidst external pressures.
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