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Riot Platforms (NASDAQ:RIOT) criticized Bitfarms (NASDAQ:BITF) for adopting a poison pill strategy to prevent a takeover, calling the move “shareholder unfriendly” and highlighting Bitfarms’ weak corporate governance.
Riot stated on Wednesday that it had privately urged Bitfarms to remove its chairman and interim CEO, Nicolas Bonta, and to appoint at least two independent directors to its board. This dispute follows Riot’s unsolicited $950 million acquisition offer made in April, which Bitfarms rejected, deeming it undervalued. In response, Bitfarms approved a poison pill plan to block hostile takeover attempts.
The plan specifies that if any entity acquires more than a 15% stake in Bitfarms between June 20 and September 10, Bitfarms will issue additional shares to other stockholders, diluting the acquiring entity’s stake. Riot contended that the 15% trigger “conflicts with established legal and governance standards.”
Riot CEO Jason Les stated, “We will continue to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say in the company’s direction.”
Bitfarms did not immediately respond to a request for comment from Reuters.
In a separate regulatory filing, Riot revealed that it had increased its stake in Bitfarms to 13.1% from 12% earlier this month, making it Bitfarms’ largest shareholder, according to LSEG data.
Despite a surge in the crypto industry due to the approval of exchange-traded funds tied to bitcoin’s spot price, shares of Riot and Bitfarms have declined by 35% and 19%, respectively, this year.
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