Bitfarms is taking a ‘poison pill’ after Riot’s takeover bid turned hostile
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Bitfarms is taking a ‘poison pill’ after Riot’s takeover bid turned hostile

(Bloomberg) — Bitcoin mining company Bitfarms Ltd. is adopting a “poison pill” shareholder rights plan as part of its defense following an unsolicited takeover bid from larger rival Riot Platforms Inc.

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A poison pill strategy is a measure used to prevent business takeovers by making the transaction too expensive for the acquiring company. Under the plan, if the entity acquires an equity stake exceeding 15% by September 10, Bitfarms will issue new shares to existing shareholders, diluting the shares of the entity seeking a hostile takeover, Bitfarms said in a statement on Monday.

In May, Riot Platforms made an unsolicited $950 million offer to buy Bitfarms Ltd. after the smaller Bitcoin mining company rejected a takeover proposal the previous month. Bitfarms said its board concluded the proposal “significantly undervalues” the company and its growth prospects.

In April, Riot privately offered Bitfarms $2.30 per share in cash and stock, about 20% above the company’s pre-offer stock price.

Riot owned 47,830,440 shares of Bitfarms, representing about 12% of the issued and outstanding shares, the company said in a June 5 statement. A Riot spokesperson did not immediately respond to requests for comment.

Bitfarms shares fell 4.2% to $2.30 on Monday, while Riot rose 1.8% to $9.90. This year, the company’s shares are down 21% and 36%, respectively.

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