Protecting Shareholder Interests with Bitfarms’ Strategic Defense Move Against Hostile Takeover
Bitcoin mining firm Bitfarms has taken a proactive step to safeguard its shareholders’ interests in response to an unsolicited takeover bid from another Bitcoin miner—Riot Platforms. This move comes after Riot Platforms significantly increased its stake in Bitfarms and made an offer to acquire all outstanding shares. Bitfarms has implemented a shareholder rights plan, commonly known as a “poison pill,” as part of its strategic defense against hostile takeovers.
Key Measures in Bitfarms’ Strategic Defense Against Hostile Takeovers
- The shareholder rights plan aims to make any potential acquisition of Bitfarms prohibitively expensive for the acquirer, thereby deterring hostile takeover attempts.
- This tactical approach ensures that Bitfarms can proceed with its strategic review process without disruptions and explore various options such as business combinations, strategic transactions, or even a potential sale.
Decision Rationale Behind Bitfarms’ Strategy
- Riot Platforms’ actions, including a proposal received in April 2024 and subsequent market purchases to bolster its stake in Bitfarms, have been viewed as undervaluing Bitfarms by the Special Committee of Independent Directors.
- The committee believes that Riot’s ongoing acquisition of shares could disrupt the integrity of the strategic review process and potentially impede the maximization of shareholder value.
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