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The Bitfarms court ruling by Ontario Capital Markets Tribunal has put an end to Bitfarms’ initial “poison pill” strategy, which was designed to thwart a takeover attempt by competitor Riot Platforms. The ruling marks a pivotal moment in the ongoing battle between the two cryptocurrency mining giants. This ruling came after TurkishNY radio reported on July 24th that Riot Platforms had acquired a block mining operation for $92.5 million.
TurkishNY Radio reports that the Ontario Capital Markets Tribunal, a division of the Ontario Securities Commission, has intervened to halt the shareholder rights plan implemented by Bitcoin mining company Bitfarms. This plan was seen as a defensive measure against Riot Platforms’ aggressive takeover bid.
Riot Platforms’ CEO, Jason Les, hailed the Bitfarms court ruling as a victory for all Bitfarms shareholders. He criticized the poison pill strategy, describing it as “an example of the broken corporate governance that plagues Bitfarms and ongoing attempts by the Bitfarms directors to entrench themselves.” His remarks underscore the contentious nature of the battle for control between the two companies.
The initial “poison pill,” or “rights plan,” was adopted by Bitfarms in early June. This move came in response to Riot Platforms’ bid to acquire all of Bitfarms’ outstanding shares.
Bitfarms argued that this strategy was necessary to preserve the integrity of the process and protect the interests of third parties. However, the Bitfarms court ruling has rendered this strategy ineffective, forcing Bitfarms to reassess its defensive measures.
Bitfarms Court Ruling Leads to New Defensive Strategy
Shortly after the Ontario regulator terminated the first “poison pill,” Bitfarms swiftly introduced another strategy. The company implemented a “new rights plan” to ensure that all shareholders are treated fairly and equally in connection with any unsolicited takeover bid. This move was a direct response to the Bitfarms court ruling, reflecting the company’s determination to protect its interests.
The new plan includes measures against “creeping bids,” a tactic where an acquirer gradually accumulates 20% or more of the company’s common shares through purchases exempt from Canadian takeover bid rules. Effective for six months, this plan allows current stockholders to buy shares at a significant discount to market price. This dilution tactic is designed to reduce the stake of any acquiring party, should a takeover attempt trigger the plan.
The backdrop to this corporate struggle is Riot Platforms’ proposal to acquire Bitfarms for $950 million in April. However, Riot Platforms later withdrew its proposal, citing difficulties in engaging with Bitfarms’ current board on a potential merger. This sequence of events highlights the fraught relationship between the two companies and the high stakes involved in this corporate maneuvering.
The Bitfarms court ruling is likely to have significant implications for the cryptocurrency mining industry. By blocking the poison pill strategy, the Tribunal has set a precedent that could influence how similar disputes are handled in the future. For Bitfarms, the ruling means that it must now navigate the competitive landscape without relying on the protective measures it initially sought to implement.
For Riot Platforms, the Bitfarms court ruling represents an opportunity to advance its strategic objectives. By challenging Bitfarms’ defensive tactics, Riot Platforms has demonstrated its willingness to fight for its interests and those of Bitfarms’ shareholders. The company’s CEO, Jason Les, has made it clear that he views the ruling as a triumph for shareholder rights and corporate governance.
The Bitfarms court ruling by the Ontario Capital Markets Tribunal marks a crucial juncture in the ongoing power struggle between Bitfarms and Riot Platforms. As Bitfarms adjusts its strategies in response to this legal setback, the industry will be closely watching to see how this battle unfolds. TurkishNY Radio will continue to provide updates on this developing story, ensuring that readers and listeners are informed about the latest developments in the world of cryptocurrency mining.
The Bitfarms court ruling shows the importance of shareholder rights and corporate governance in the rapidly evolving cryptocurrency sector. As the dust settles, both Bitfarms and Riot Platforms will need to navigate a complex landscape, balancing their strategic objectives with the interests of their shareholders. The outcome of this struggle will likely have far-reaching implications for the industry as a whole.
