Bitfarms Adopts New Shareholder Rights Plan Amid Tribunal Decision

Bitfarms
Ltd.
(Nasdaq/TSX:
BITF),
a
global
Bitcoin
data
center
company,
has
announced
the
adoption
of
a
new
shareholder
rights
plan
following
a
decision
by
the
Capital
Markets
Tribunal
of
the
Ontario
Securities
Commission
to
cease
trade
the
company’s
previous
rights
plan,
according
to

GlobeNewswire.

Tribunal
Decision

The
Tribunal’s
verdict
came
after
hearings
on
July
22
and
23,
2024.
The
decision
effectively
terminates
Bitfarms’
former
shareholder
rights
plan,
which
was
initially
put
in
place
to
preserve
the
integrity
of
the
independent
Special
Committee’s
strategic
review
process
amid
attempts
by
Riot
Platforms,
Inc.
to
acquire
the
company.

New
Shareholder
Rights
Plan

In
response
to
this
development,
Bitfarms’
Board
of
Directors
has
unanimously
approved
a
new
shareholder
rights
plan.
The
plan,
effective
from
July
24,
2024,
aims
to
ensure
fair
and
equal
treatment
of
all
shareholders
in
connection
with
any
unsolicited
take-over
bid
or
acquisition
of
control
of
the
company.
The
new
plan
also
provides
protection
against ‘creeping
bids,’
where
an
entity
accumulates
20%
or
more
of
the
company’s
shares
through
exempt
purchases
from
Canadian
take-over
bid
rules.

“The
Tribunal
has
decided
to
cease
trade
Bitfarms’
Rights
Plan,
which
effectively
terminates
the
plan.
In
light
of
this
decision,
the
Bitfarms
Board
has
adopted
the
New
Rights
Plan
to
ensure
the
interests
of
all
shareholders
are
protected,”
said
Brian
Howlett,
Lead
Director
of
the
Bitfarms
Board.

Provisions
and
Effectiveness

The
new
rights
plan
stipulates
that
one
right
will
be
issued
and
attached
to
each
common
share
outstanding
as
of
August
6,
2024.
These
rights
will
become
exercisable
if
any
person,
together
with
related
persons,
acquires
or
announces
the
intention
to
acquire
20%
or
more
of
the
company’s
common
shares
without
complying
with
the ‘Permitted
Bid’
provisions.
A ‘Permitted
Bid’
is
defined
as
a
take-over
bid
that
meets
specific
conditions,
including
being
open
for
105
days
and
no
shares
being
taken
up
unless
more
than
50%
of
shares
held
by
independent
shareholders
are
tendered.

The
new
plan
is
subject
to
shareholder
ratification
within
six
months.
If
ratified,
it
will
have
an
initial
term
of
three
years.
The
plan
also
requires
acceptance
by
the
Toronto
Stock
Exchange
(TSX),
which
may
defer
its
consideration
pending
satisfaction
that
no
further
intervention
by
the
securities
commission
will
occur.

Company
Overview
and
Future
Prospects

Founded
in
2017,
Bitfarms
operates
12
data
centers
and
is
developing
two
more
across
four
countries.
The
company
is
committed
to
using
sustainable
energy,
primarily
hydro-electric
power.
Despite
the
Tribunal’s
decision,
the
Board
emphasized
that
it
remains
committed
to
maximizing
value
for
shareholders
and
achieving
the
best
possible
outcomes
for
the
company.

Bitfarms
has
engaged
Moelis
&
Company
LLC
as
its
financial
advisor,
with
legal
advice
provided
by
Skadden,
Arps,
Slate,
Meagher
&
Flom
LLP,
Peterson
McVicar
LLP,
and
McMillan
LLP.
Strategic
advice
and
proxy
solicitation
support
are
being
provided
by
Innisfree
M&A
Incorporated
and
Laurel
Hill
Advisory
Group.

The
new
rights
plan
is
seen
as
a
measure
to
protect
shareholder
interests
amid
potential
acquisition
attempts,
ensuring
that
any
such
bids
are
conducted
fairly
and
transparently.

Image
source:
Shutterstock