According to Cointelegraph, the Capital Markets Court of Ontario, Canada, has issued a cease-and-desist order against Bitcoin mining company Bitfarm’s “poison pill” strategy to counter the acquisition of rival Riot Platforms. Riot Platforms said in a press release issued on Wednesday (24th) that the order takes effect immediately.

Since June 13, Bitfarms has continued to oppose Riot’s $950 million acquisition offer, saying it unfairly undervalues ​​the company. In order to block the acquisition, Bitfarms adopted a "Shareholder rights plan" known as the "poison pill" strategy.

The poison pill strategy is often used by companies seeking to thwart hostile takeovers. Companies employing this strategy often allow existing shareholders to purchase additional shares at a steep discount, thereby diluting the value of the acquirer's shares. Under Bitfarm's now-defunct shareholder 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, diluting that entity's stake.

Riot Platforms CEO Jason Les said in a press release:

“The court’s decision in favor of Riot’s application is a victory for all Bitfarms shareholders, and the adoption of the off-site poison pill scheme is yet another example of the poor corporate governance plaguing Bitfarms and the ongoing intent of Bitfarms directors to consolidate their position. "

Riot said that the company believes that the three directors it nominated, John Delaney, Amy Freedman and Ralph Goehring, must be elected to Bitfarm’s board of directors at the next shareholder meeting on October 29, 2024 “to repair Bitfarms’ poor performance.” Corporate Governance".

At the same time, Bitfarms also issued a press release in response to the ruling. Brian Howlett, lead director of the Bitfarms board of directors, said that Bitfarms directors have adopted a new shareholder rights plan to ensure that the interests of all shareholders are protected.

Source