Judge orders Bitfarms to immediately end its poison pill strategy to oppose Riot Platforms acquisition

Crypto mining company Riot Platforms said in a statement on July 24 that the Ontario Capital Markets Tribunal issued a cease-trading order against Bitfarms' poison pill plan, immediately ending the strategy. Bitfarms has been opposing Riot Platforms' $950 million takeover offer since June 13, saying Riot unfairly undervalued the company. The company adopted a poison pill strategy known as a "rights plan" to try to prevent the acquisition. Poison pills are often used by companies to prevent hostile takeovers. Under the strategy, existing shareholders purchase additional shares at a significant discount, diluting the value of the acquirer's shares. Under Bitfarms' now-defunct rights plan, if any entity acquired more than 15% of the company's outstanding shares before September 10, Bitfarms would issue new shares to other existing shareholders, thereby reducing the entity's ownership. "The court's ruling in favor of Riot's application is a victory for all Bitfarms shareholders," said Jason Les, CEO of Riot Platforms, in a statement. "The adoption of an off-market poison pill strategy is another example of problematic corporate governance at Bitfarms and an effort by Bitfarms' directors to entrench their positions," Les added. Riot said it believes three director candidates, John Delaney, Amy Freedman and Ralph Goehring, must be elected to the Bitfarms board at the next shareholder meeting on October 29. Meanwhile, Brian Howlett, lead director of the Bitfarms board, said the plan was implemented to "preserve the integrity" of the alternative acquisition process in light of Riot's "opportunistic" attempt to acquire the company. (Cointelegraph)