RIOT Platforms, one of the largest Bitcoin mining companies in the US, cannot finalize its attempts to acquire Bitfarms. RIOT, which made an offer of 950 million dollars for Bitfarms in April, received a “No” answer. RIOT, which then sold 13% of Bitfarms’ shares, is trying to respond to Bitfarms with a “poison pill plan”.
What is a “poison pill plan”?
The poison pill plan is known as a move by the board of directors of the target company to issue additional shares. In other words, Bitfarms plans to issue additional shares and sell them to investors at a discounted price if RIOT rises above a certain share ratio. In this way, the proportion of shares owned by RIOT will also decrease. Of course, Bitfarms shares will inevitably lose value.
RIOT reacted: This is to the detriment of the company
In the statement made by RIOT Platforms, it was stated that this step of Bitfarms does not comply with corporate company policies and is to the detriment of shareholders. The statement also stated that the interim CEO and chairman of the board should be dismissed, and that it would be right for at least two independent people to join the board of directors.
If 15% is passed, the “poison pill” will be activated
Under the poison pill plan, if any company holds a 15% stake in Bitfarms between June 20 and September 10, new shares will be issued for shareholders.
RIOT CEO Jason Les, who was among the mining company executives who met with Donald Trump the other day, said, “There are serious governance issues here. Shareholders’ decisions are also important. There must be a management where their opinions are taken seriously.”“RIOT is attacking us”
Bitfarms responded to this statement late at night and said, “RIOT is attacking our board of directors.The proposal is in no way in the interests of our shareholders.”
Share ratio is increasing
RIOT, which held a 9% stake in Bitfarms in May, increased this to 13.1%.Last week, RIOT officially reported this to the SEC. Currently, RIOT is the largest shareholder of Bitfarms.
Geoffrey Morphy, the former CEO of Bitfarms, sued the company for $27 million in May for failing to fulfill the terms of the contract. Morphy was dismissed by the board of directors and Nicolas Bonta, one of the founders of the company, was temporarily replaced.