Bitfarms Implements Shareholder Rights Plan Amid Riot Platforms’ Hostile Takeover Attempt

Bitfarms
Ltd.
(Nasdaq/TSX:
BITF),
a
global
Bitcoin
mining
company,
has
announced
the
adoption
of
a
shareholder
rights
plan,
according
to
a
recent
press
release.
This
strategic
move
comes
as
a
response
to
an
unsolicited
takeover
bid
by
Riot
Platforms,
Inc.
and
aims
to
protect
the
interests
of
Bitfarms’
shareholders.

Shareholder
Rights
Plan

The
Board
of
Directors
of
Bitfarms
unanimously
approved
the
adoption
of
the
shareholder
rights
plan
(“Rights
Plan”)
on
June
10,
2024.
The
plan
was
implemented
to
preserve
the
integrity
of
the
company’s
strategic
alternatives
review
process,
which
is
currently
being
conducted
by
a
special
committee
of
independent
directors.
The
review
process
is
considering
various
options,
including
continuing
to
execute
the
company’s
business
plan,
a
business
combination,
or
a
potential
sale
of
the
company.

Riot
Platforms
has
been
actively
increasing
its
stake
in
Bitfarms,
currently
holding
47,830,440
common
shares,
representing
11.62%
of
the
company’s
outstanding
voting
securities.
Despite
an
initial
proposal
to
acquire
all
outstanding
shares,
which
was
rejected
for
undervaluing
the
company,
Riot
has
continued
to
acquire
additional
shares,
raising
concerns
among
Bitfarms’
board
members.

Response
to
Riot’s
Actions

Riot’s
actions
have
prompted
Bitfarms
to
adopt
the
Rights
Plan
to
ensure
that
the
Board
has
sufficient
time
to
explore
and
negotiate
alternative
strategies
that
could
provide
better
value
for
shareholders.
The
plan
prevents
any
shareholder
from
acquiring
15%
or
more
of
Bitfarms’
common
shares
without
triggering
the
rights,
which
would
allow
other
shareholders
to
purchase
additional
shares
at
a
significant
discount.

The
Rights
Plan
does
not
prevent
Riot
from
making
an
unsolicited
takeover
bid
in
compliance
with
Canadian
securities
laws,
nor
does
it
restrict
Riot
from
making
nominations
or
soliciting
proxies.
It
is
designed
to
provide
a
fair
opportunity
for
the
Board
to
consider
all
alternatives
and
to
maximize
shareholder
value.

Implementation
Details

On
June
20,
2024,
one
right
will
be
issued
for
each
outstanding
common
share,
and
each
right
will
become
exercisable
if
any
person
or
group
acquires
15%
or
more
of
Bitfarms’
common
shares
before
September
10,
2024,
or
20%
thereafter.
The
plan
will
remain
effective
until
it
is
ratified
by
shareholders
within
the
next
six
months.

The
adoption
of
the
Rights
Plan
is
also
subject
to
the
acceptance
of
the
Toronto
Stock
Exchange
(TSX).
The
TSX
may
defer
its
consideration
until
it
is
satisfied
that
the
appropriate
securities
commission
will
not
intervene.
The
Board
is
not
aware
of
any
other
pending
or
threatened
takeover
bids
at
this
time.

About
Bitfarms
Ltd.

Founded
in
2017,
Bitfarms
is
a
global
Bitcoin
mining
company
that
operates
12
mining
facilities
across
four
countries:
Canada,
the
United
States,
Paraguay,
and
Argentina.
The
company
focuses
on
using
environmentally
friendly
hydro-electric
power
and
is
committed
to
sustainable
energy
practices.
Bitfarms
develops
and
manages
its
facilities
in-house,
ensuring
best-in-class
operational
performance
and
uptime.

Image
source:
Shutterstock

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