Riot acquires 13% Bitfarms stake as CEO decries ‘poison pill‘ strategy

The NFT Unicorn 8f29a630-5e8a-463b-bb3d-7b5c8c812f75 Riot acquires 13% Bitfarms stake as CEO decries ‘poison pill‘ strategy Crypto News

Jason Les, CEO of cryptocurrency mining firm Riot Platforms, opposes a Bitfarms plan to prevent the company from acquiring a more than 15% stake in a corporate takeover.

In a June 11 filing with the United States Securities and Exchange Commission, Riot disclosed that it had purchased roughly six million common shares of Bitfarms in three separate trades. The shares — worth more than $111 million at the time of purchase — and Riot’s previous acquisitions meant the company held a 13.1% stake in Bitfarms.

Bitfarms announced a shareholder rights plan on June 10 that suggested a “poison pill” strategy as part of its defense against a Riot takeover. The plan will attempt to interfere with Riot acquiring a 15% or higher stake in Bitfarms, slowing the company’s initial plans for a takeover by diluting the value of its shares.

In a June 12 statement, Les claimed that the Bitfarms plan was ”in direct conflict with established legal and governance standards” by lowering the threshold to 15% rather than “the customary 20%.” According to Bitfarms, the shareholder plan still allowed Riot to continue with its plans for a takeover “in accordance with applicable Canadian securities laws.”

Related: Bitcoin halving impacts miner Riot’s revenue by 43% despite new facility

Riot, based in the United States, offered to acquire the Canada-based mining firm for $950 million in May. This price represented a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24. Bitfarms’ stock price on the Nasdaq has increased more than 56% in the last 30 days amid the takeover plans.

In May, Bitfarms announced that its former CEO, Geoffrey Morphy, would step down after filing a lawsuit against the mining firm. Nicolas Bonta has been acting as the interim president and CEO until the company decides on a replacement for Morphy. Les called on the board to remove Bonta, claiming he “bears direct responsibility for [Bitfarms’] poor corporate governance practices.”

Magazine: ‘Bitcoin Layer 2’ sidechains aren’t really L2s: There is a better way