Bitcoin Miner Bitfarms Plans Expansion Amid Hostile Takeover Bid
Shares in Bitfarms surged 17% after revealing plans to expand to Pennsylvania and fend off a hostile takeover. The Toronto-based Bitcoin miner aims to increase its total power capacity by 648 MW by 2025, with a new site adding 120 MW immediately.
Bitfarms intends to lease a facility in Pennsylvania to support its mining operations, citing its competitive electricity supply. The company paid for access to a 11,200-square-foot warehouse in the U.S. by issuing 1.5 million common shares.
Meanwhile, Bitfarms faces pressure from Riot Platforms, which recently acquired 12% of its outstanding shares and criticized Bitfarmβs governance, prompting a public dispute and accusations of undervaluation.
Bitfarms’ Strategic Response to the Hostile Takeover Bid
Bitfarms defended its position, stating that Riot’s proposal undervalued the company and was not in shareholders’ best interests. A special committee of independent directors assessed Riot’s bid, concluding that it was unfavorable and not acting in good faith.
- The company’s strategic response included implementing a poison pill, preventing Riot from acquiring more than 15% of its common shares without a formal takeover bid.
- Poison pills are a common defense tactic used to deter hostile takeovers by making a company’s shares less attractive to potential acquirers.
Riot Platforms’ Reaction and Continued Dispute
Riot Platforms criticized Bitfarms’ adoption of the poison pill strategy as a defensive move against its acquisition attempts. The ongoing dispute highlights the significant governance issues between the two entities.
Despite the public scrutiny and accusations, Bitfarms remains steadfast in defending its position and believes that Riot’s actions are self-serving and not in the best interests of the company or its shareholders.
Way Forward for Bitfarms and the Hostile Takeover Scenario
As the battle for control continues, it remains to be seen how Bitfarms will navigate the hostile takeover bid and its implications on the company’s future operations and governance structure.
Both Bitfarms and Riot Platforms are set on their respective paths, seeking to secure their interests in the contentious battle for control and governance of the Toronto-based Bitcoin miner.
Hot Take: Closing Thoughts on Bitfarms and the Hostile Takeover Bid
In the high-stakes world of cryptocurrency mining, conflicts like the one between Bitfarms and Riot Platforms are not uncommon. The outcome of this struggle will have far-reaching implications for both companies and the broader crypto industry.
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