Bitfarms, a prominent Bitcoin miner, has taken a proactive step to protect its shareholders' interests by adopting a shareholder rights plan, commonly known as a "poison pill." This strategic move aims to prevent any entity from gaining control of the company without providing fair value to all shareholders. The decision comes on the heels of Riot Platforms' unsolicited takeover bid, which was rejected by Bitfarms due to its undervaluation of the company.

The shareholder rights plan, effective immediately, grants one right for each common share outstanding as of June 20. These rights will become exercisable if any entity acquires 15% or more of Bitfarms' outstanding common shares without complying with the plan's "Permitted Bid" provisions. The plan requires any potential acquirer to make a bid to all shareholders, remain open for 105 days, and meet specific conditions to ensure fairness and equity for all parties involved.

Bitfarms' Board of Directors unanimously approved the plan to preserve the integrity of its strategic alternatives review process. The move is designed to prevent Riot Platforms, which currently holds an 11.62% stake in Bitfarms, from further accumulating shares and disrupting the review process. Despite Bitfarms' rejection of Riot's takeover bid, the latter continued to purchase shares, prompting the need for a defensive measure to safeguard shareholders' interests.

The Rights Plan will remain operative and effective for a minimum of six months from June 10, unless terminated earlier. Bitfarms has also received notification from the Toronto Stock Exchange (TSX) that it will defer consideration of the Rights Plan until the appropriate securities commission decides not to intervene. This deferral does not affect the plan's adoption or operation.

Bitfarms' Special Committee of independent directors believes that the adoption of the Rights Plan is crucial to ensuring the Board has sufficient time to explore and negotiate alternatives that could deliver the best value for shareholders. By activating this defensive measure, Bitfarms aims to protect its strategic review process and ensure that any potential acquirer provides fair value to all shareholders.

In a move to strengthen its position, Bitfarms has also engaged in discussions with potential strategic partners and investors to explore alternative transactions that could maximize shareholder value. The company remains committed to evaluating all options that align with its strategic objectives and create long-term value for its shareholders.

The adoption of the shareholder rights plan demonstrates Bitfarms' dedication to protecting the interests of its shareholders and ensuring that any potential transaction is fair, equitable, and in the best interests of the company. As the situation continues to unfold, Bitfarms remains focused on delivering value to its shareholders and driving growth in the Bitcoin mining industry.