Bitfarms has taken a proactive measure to safeguard the interests of its shareholders by implementing a shareholder rights plan. This move is a response to the unsolicited takeover bid from Riot Platforms Inc. and aims to ensure that any acquisition attempts are made on fair and reasonable terms. The plan, also known as a "poison pill," is designed to prevent any entity from gaining control of Bitfarms without providing adequate value to all shareholders.

The shareholder rights plan will issue one right for each outstanding common share as of June 20, which will become exercisable if any entity acquires 15% or more of Bitfarms' outstanding common shares without meeting the plan's "Permitted Bid" requirements. These requirements include making bids to all shareholders, remaining open for 105 days, and meeting other specific conditions. While the plan is effective immediately, it requires shareholder ratification within six months.

Bitfarms' decision to adopt the shareholder rights plan comes after Riot Platforms made an unsolicited proposal to acquire the company for approximately $950 million. Bitfarms rejected the offer, citing that it undervalued the company and its growth prospects. Despite this, Riot Platforms has continued to acquire shares of Bitfarms, increasing its stake to approximately 12% and becoming the company's largest shareholder.

The adoption of the shareholder rights plan demonstrates Bitfarms' commitment to protecting the interests of its shareholders. By making any potential acquisition more expensive for the acquiring company, the plan aims to ensure that any takeover attempts are made on fair and reasonable terms. This move also highlights the importance of fair value in corporate transactions and the need for companies to prioritize the interests of their shareholders.

The implementation of the shareholder rights plan is a significant development in the ongoing saga between Bitfarms and Riot Platforms. As the situation continues to unfold, it remains to be seen how Riot Platforms will respond to this move and whether a resolution can be reached that benefits all parties involved.