Riot’s Bitcoin Takeover Intensifies as Bitfarms Adopts New Rights Plan
Canadian regulator nixes Bitfarms’ initial poison pill
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Riot’s ongoing takeover bid for rival bitcoin miner Bitfarms has intensified as the Ontario Capital Markets Tribunal sided with Riot’s application to terminate Bitfarms’ initial “poison pill” strategy.
Riot announced the regulator’s decision on Wednesday following a tribunal hearing this week, touting it as a “win for all Bitfarms shareholders” in the latest corporate battle that underscores the intense competition in bitcoin mining.
However, Bitfarms swiftly responded by adopting a new shareholder rights plan to ensure fair treatment of shareholders in any future acquisition attempts. This plan aims to protect against “creeping bids,” wherein a company accumulates a significant stake without launching a formal takeover bid.
Under the new plan, shareholders as of August 6 will receive one right per share, exercisable if any person or group acquires 20% or more of Bitfarms’ shares without making a “Permitted Bid”—a takeover bid that complies with specific conditions such as being open for 105 days and requiring at least 50% of independent shareholder support.
Bitfarms first revealed a shareholder rights plan in June to prevent a hostile takeover by the Texas competitor via shareholder dilution, which would be triggered if any entity accumulated more than 15% of Bitfarms’ outstanding common stocks. The new plan revises the trigger threshold to 20% and is still subject to shareholder ratification and acceptance by the Toronto Stock Exchange.
The conflict between Riot and Bitfarms has escalated over the past few months after Bitfarms rejected Riot’s $1 billion acquisition bid in May 2024. This led to Riot’s public campaign to influence Bitfarms’ shareholders and management, aiming to replace key board members to facilitate the takeover.
In response to Riot’s aggressive moves, Bitfarms bolstered its board by adding Fanny Philip, a seasoned executive with experience in the tech and crypto sectors, and promoted Ben Gagnon to the CEO role.
Riot has invested over $130 million so far to accumulate 14.9% of the outstanding common stocks of Bitfarms.
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