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Bitfarms’ Poison Pill Draws Fire from Riot Platforms

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Bitfarms’ Poison Pill Draws Fire from Riot Platforms

Riot Platforms criticizes Bitfarms’ adoption of the Poison Pill, which the former described as an unfriendly shareholder rights plan.

The plan imposes certain restrictions on the acquisition of Bitfarms’ shares.

As per Riot’s statement, the Poison Pill highlights a lack of solid corporate governance standards.

Riot Platforms, a major North American Bitcoin mining company, has sharply criticized rival Bitfarms for adopting a “poison pill” strategy to thwart potential takeovers.

Riot alleges the move reflects poor corporate governance and disregards shareholder interests.

According to Riot Platform’s press release, Bitfarms’ plan, now in effect, imposes certain restrictions on the acquisition of the company’s shares.

Specifically, Bitfarms seeks to block any shareholder from acquiring 15% or more of the company’s common shares without a formal takeover bid for all of the company’s shares.

Riot Comments on Bitfarms’ Adoption of Shareholder-Unfriendly Poison Pill

Poison Pill Comes Just Days After Riot Privately Urged Bitfarms to Consult with Riot and Other Large Shareholders on New Board Members and Stressed that Chairman Nicolas Bonta Must Resign to Address…

— Riot Platforms, Inc. (@RiotPlatforms) June 12, 2024

In an X post, Riot Platforms stated that this plan comes on the heels of Riot Platforms’ recent private outreach to Bitfarms. Subsequently, Riot Platforms wrote to Bitfarms, urging them to add two new independent board members and remove Chairman Nicolas Bonta.

Riot Platforms CEO Jason Les stated, “In our most recent letter, we urged the Bitfarms Board to facilitate the resignation and removal of Chairman and interim CEO Nicolas Bonta…as a first step to address shareholders’ concerns.”

Criticizing Bitfarms’ move, Les further added:

“This action further demonstrates the Bitfarms Board’s entrenchment and disregard for the perspectives of its shareholders, who clearly signaled their discontent less than two weeks ago when they voted out Company co-founder Emiliano Grodzki.”

According to a Reuters report, the conflict escalated in April when Riot Platforms offered to buy Bitfarms for $950 million, a proposal Bitfarms rejected as undervaluing the company.

Bitfarms’ adoption of the “poison pill” is a direct response to thwart Riot’s takeover attempt.

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