Bitfarms Implements "Poison Pill" Plan to Deter Hostile Takeover

Bitfarms Implements "Poison Pill" Plan to Deter Hostile Takeover

Elena Lopez
2 min read

Bitfarms Implements "Poison Pill" Plan to Deter Hostile Takeover

Bitcoin mining company, Bitfarms, has taken a defensive stance against a hostile takeover bid from rival Riot Platforms by activating a shareholder rights plan, known as a "poison pill." This strategic move follows Riot's increased stake in Bitfarms and its unsolicited offer to acquire all outstanding shares. The plan, effective from June 20, 2024, aims to make a takeover prohibitively expensive for Riot by triggering if an entity acquires more than 15% of Bitfarms' shares by September 10, 2024, or 20% thereafter without following the plan. It enables Bitfarms to continue its strategic review process and explore various options, including potential mergers or sales, without disruption. Furthermore, the plan safeguards shareholders by allowing them to purchase additional shares at a discount if takeover thresholds are breached. However, the implementation of this plan is subject to approval by Bitfarms' shareholders and the Toronto Stock Exchange.

Key Takeaways

  • Bitfarms employs a "poison pill" strategy to deter Riot Platforms' hostile takeover bid.
  • A Special Committee of Independent Directors notes that Riot Platforms' takeover attempts undervalue Bitfarms.
  • The rights plan activates if an entity acquires over 15% of Bitfarms' shares by September 10, 2024.
  • Despite Riot Platforms' unsolicited $950 million offer, Bitfarms' stock dropped 4.17% post-announcement, in contrast to Riot Platforms' 1.8% increase.


Bitfarms' adoption of a "poison pill" aims to thwart Riot Platforms' takeover, asserting concerns over undervaluation. If triggered, this defensive tactic will complicate Riot's strategy, potentially inflating takeover costs. The stock market response reflects investor sentiments, with Bitfarms experiencing a decline and Riot Platforms seeing a marginal gain. Long-term implications of Bitfarms' strategic review could lead to significant changes in the cryptocurrency mining landscape, possibly involving mergers or sales. The plan's execution will be influenced by shareholder approval and stock exchange regulations, subsequently impacting investor confidence and market dynamics.

Did You Know?

  • Poison Pill: A defensive strategy employed by corporations to discourage hostile takeovers, involving the issuance of new shares to existing shareholders at a discount, thereby diluting the acquiring party's ownership and increasing the takeover's cost and complexity.
  • Hostile Takeover: An acquisition of a company against the target company's management's wishes, often bypassing the board of directors and directly appealing to shareholders.
  • Strategic Review Process: A comprehensive evaluation conducted by a company's board of directors or a special committee to assess strategic options, including mergers, acquisitions, sales, or other structural changes, typically initiated in response to significant challenges or opportunities.

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