Bitcoin miner Bitfarms announced that its Board of Directors has unanimously approved a shareholder rights plan, effective immediately, to protect the integrity of its strategic alternatives review process.

This "poison pill" plan is intended to prevent any entity from taking control of Bitfarms without offering fair value to all shareholders. The decision follows Bitfarms' rejection of an unsolicited $950 million takeover bid from Riot Platforms.

Under the Rights Plan, one right will be issued for each common share as of June 20. These rights become exercisable if any party acquires 15% or more of Bitfarms’ shares without adhering to the plan’s "Permitted Bid" conditions, which require offers to be made to all shareholders, remain open for 105 days, and meet other criteria. While effective immediately, the Rights Plan needs shareholder ratification within six months.

The Toronto Stock Exchange (TSX) has notified Bitfarms that it will defer its consideration of the Rights Plan until satisfied that the appropriate securities commission will not intervene. However, this deferral does not affect the plan's adoption or operation, which will remain effective for at least six months from June 10.

The move responds to Riot Platforms' unsolicited bid to acquire all outstanding shares, following its increase in ownership to 11.62%. Bitfarms’ Special Committee of independent directors determined that Riot’s offer undervalued the company. Despite welcoming Riot's interest and agreeing to a standstill term, Riot continued to purchase shares, increasing its stake by an additional 8.01%.

The Special Committee believes the Rights Plan is essential to ensure Bitfarms’ Board has enough time to explore and negotiate alternatives that could provide the best value for shareholders, protecting the strategic review process from further disruptive share accumulation by Riot, especially beyond the 15% threshold.