Riot Platforms attacks Bitfarms over poison pill

The dispute stems from an unsolicited offer Riot made in April to acquire Bitfarms for nearly $950 million

Riot Platforms said Bitfarms’ move to adopt a poison pill to prevent its acquisition by the bitcoin miner was “shareholder unfriendly” and highlighted the lack of solid corporate governance standards.

Riot said on Wednesday it had privately urged Bitfarms to remove its chairman and interim CEO, Nicolas Bonta, and add at least two new independent directors to its board.

The dispute stems from an unsolicited offer Riot made in April to acquire Bitfarms for nearly $950 million. Bitfarms rejected the offer, saying it significantly undervalued the firm, and approved a poison pill plan to prevent any attempts of a hostile takeover.

Under the plan, if an entity takes more than 15% stake in the firm after June 20 and up to September 10, Bitfarms will issue fresh shares to other stockholders, diluting the entity’s stake.

The 15% trigger “is in direct conflict with established legal and governance standards,” Riot stated on Wednesday.

We will continue to push to address the serious corporate governance issues at Bitfarms and make sure that shareholders have a say on the firm’s path forward, Riot CEO Jason Les said.

Bitfarms said late on Wednesday that it is clear that Riot’s interests are not aligned with those of its shareholders.

Riot is “attacking” its board and corporate governance in an effort to push its “low-ball bid and disrupt” the strategic alternatives review process, Bitfarms said in a statement.

Separately, Riot disclosed in a regulatory filing it had increased its stake in Bitfarms to 13.1% from 12% earlier this month. The firm is Bitfarms’ biggest shareholder, as per LSEG data.

Shares of both Riot and Bitfarms have been hammered so far this year, declining 35% and 19%, respectively, despite a wave of optimism in the crypto industry because of the approval of ETFs tied to the spot price of bitcoin.