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Riot Nears 20% in Bitfarms, Close to Trigger ‘Poison Pill’

August 21, 2024
Bitcoin mining facility in Iowa

Riot Platforms has escalated its takeover efforts against rival bitcoin miner Bitfarms by increasing its stake to 19.9%, edging close to the 20% threshold that would activate Bitfarms’ poison pill defense.

According to Riot’s filing on Wednesday, the company invested an additional $10 million since August 15 to acquire 4.5 million more shares of Bitfarms, bringing its total holdings to 19.9% as of August 20.

Bitfarms adopted a second shareholder rights plan – known as a “poison pill” strategy – granting shareholders one right per share, exercisable if any entity acquires 20% or more of Bitfarms’ shares without a “Permitted Bid.”

This move came after the Ontario Capital Markets Tribunal sided with Riot in terminating Bitfarms’ initial poison pill strategy, which had a triggering threshold of 15%.

Since April, Riot has invested $180 million to accumulate 80.8 million shares of Bitfarms at an average cost of $2.23 per share. Bitfarms has scheduled a special shareholders meeting for Oct. 29 to vote on the takeover bid.

Riot’s aggressive acquisition comes during a period of heightened consolidation and competition in the bitcoin mining industry, following the recent halving event.

Meanwhile, Bitfarms announced on Wednesday an all-stock merger with Stronghold Digital to expand its U.S. bitcoin mining and energy capacities, though its stock price dipped by 5.5% to $2.24 after the news.

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