2024 Bitcoin Mining Merger? Riot Platforms Edges Closer to Bitfarms Acquisition After Court Win

• Tribunal blocks Bitfarms’ poison pill, advancing Riot Platforms’ $950M takeover bid.
• Bitfarms faces internal upheaval as interim CEO Bonta deals with Riot’s takeover push.
• Riot Platforms pushes for new board members amid Bitfarms’ legal and governance challenges.

The Ontario Capital Markets Tribunal has invalidated Bitfarms’ “poison pill” strategy designed to thwart Riot Platforms’ takeover bid. This strategy, formally known as a “rights plan,” was meant to prevent Riot’s $950 million buyout offer from proceeding. The tribunal’s decision halts Bitfarms’ attempts to fend off Riot’s acquisition by ceasing the rights plan immediately.

Bitfarms, a major player in Bitcoin mining with operations spanning Canada, the U.S., Paraguay, and Argentina, has been under pressure since June 13, when Riot Platforms made its buyout proposal.

The company responded by stating that the offer made to its stockholders undervalued its properties and thus the poison pill strategy was initiated. This involves offering new shares to those existing shareholders at lower prices than what the potential acquirer is willing to pay, making the takeover less attractive.

The tribunal’s ruling is seen as a victory for Riot Platforms and its CEO, Jason Les. Les has criticized Bitfarms for its defensive maneuver, claiming it reflects poor corporate governance.

According to Les, the poison pill strategy is a tactic to entrench Bitfarms’ current board members and thwart the takeover attempt. This ruling aligns with Riot’s aim to have its proposed board members John Delaney, Amy Freedman, and Ralph Goehring elected to Bitfarms’ board at the upcoming shareholder meeting scheduled for October 29.

In response, Bitfarms has adopted a new rights plan. This revised strategy aims to protect shareholder interests while addressing the tribunal’s decision. 

Lead Director Brian Howlett stated that the original rights plan was designed to preserve the integrity of alternative takeover processes. Despite the tribunal’s ruling, Bitfarms is committed to ensuring fair treatment of all shareholders through its new plan.

Bitfarms is also grappling with internal changes. Former CEO Geoffrey Morphy’s recent departure and ongoing legal issues have left Nicolas Bonta as the interim president and CEO. Riot Platforms has urged Bitfarms’ board to remove Bonta, citing his responsibility for the company’s governance issues.