The court ruled to terminate the "poison pill" strategy of Bitcoin mining company Bitfarms
According to Cointelegraph, the Ontario Capital Markets Court in Canada has issued a cease and desist order for the "poison pill" strategy implemented by Bitcoin mining company Bitfarm to counter the acquisition of competitor Riot Platforms. Riot Platforms announced in a press release on Wednesday (24th) that the order will take immediate effect.
Since June 13th, Bitfarms has consistently opposed Riot's proposed $950 million acquisition offer, claiming that it unfairly undervalued the company's value. To prevent this acquisition, Bitfarms adopted a "poison pill" strategy called the "Shareholder Rights Plan".
The poison pill strategy is usually used by companies seeking to prevent hostile takeovers, and companies adopting this strategy often allow existing shareholders to purchase additional shares at a significant discount, thereby diluting the value of the acquirer's shares. Under Bitfarm's now defunct shareholder rights plan, if any entity acquires more than 15% of the company's outstanding shares before September 10th, Bitfarm will issue new shares to other existing shareholders, diluting the entity's equity.
Riot Platforms CEO Jason Les stated in a press release:
The court's ruling in support of Riot's application is a victory for all Bitfarms shareholders, and the adoption of the over-the-counter drug pill program is another example of the poor corporate governance that has plagued Bitfarms and the continued intention of Bitfarms directors to consolidate their position
Riot stated that the company believes its three nominated directors, John Delaney, Amy Freedman, and Ralph Goehring, must be elected as members of Bitfarm's board of directors at the next shareholder meeting on October 29, 2024, "to fix Bitfarm's poor corporate governance.
At the same time, Bitfarms also issued a press release regarding this ruling. Brian Howlett, the Chief Director of the Bitfarms Board of Directors, stated that the Bitfarms board has adopted a new shareholder rights plan to ensure the protection of the interests of all shareholders.
