Bitfarms adopts new ‘poison pill’ after Canadian regulator terminates previous one

The Ontario Capital Markets Tribunal has terminated Bitfarms’ first “poison pill” adopted to fend off a potential takeover attempt by rival Riot Platforms.

A division of the Ontario Securities Commission, the Ontario Capital Markets Tribunal, ceased the shareholder rights plan implemented by Bitcoin btc-0.86% Bitcoin mining company Bitfarms after its competitor Riot Platforms initiated its takeover bid.

Riot Platforms chief executive Jason Les says the ruling is a “win for all Bitfarms shareholders,” criticizing the poison pill as “yet another example of the broken corporate governance that plagues Bitfarms and of the ongoing attempts by the Bitfarms directors to entrench themselves.”

Bitfarms adopted the first “poison pill” also known as the “rights plan” in early June in response to Riot Platforms’ attempt to buy out all of its outstanding shares, what the Canadian miner described as an “attempt to undermine the integrity of the process and thwart the interest of third parties.”

However, shortly after the Canadian regulator terminated the first “poison pill,” Bitfarms quickly adopted another one to “ensure that all shareholders of the company are treated fairly and equally in connection with any unsolicited take-over bid.”

Called the “new rights plan,” the second de-facto “poison pill” includes the protection against the so-called “creeping bids,” where an acquirer gradually accumulates 20% or more of the company’s common shares through purchases exempt from Canadian take-over bid rules. This plan will be effective for six months, allowing current stockholders to buy shares at a significant discount to market price, thus diluting any acquiring party’s stake if a takeover attempt triggers it.

Earlier in April, Riot Platforms proposed acquiring Bitfarms for $950 million. However, Riot subsequently withdrew its proposal, citing an inability to engage with Bitfarms’ current board on a potential merger.