Riot Platforms has criticized Bitfarms’ decision to implement a poison pill strategy to prevent its acquisition, calling it “shareholder unfriendly” and highlighting concerns over Bitfarms’ corporate governance standards.
On Wednesday, Riot revealed that it had privately urged Bitfarms to remove its chairman and interim CEO, Nicolas Bonta, and to appoint at least two new independent directors to its board.
The conflict began when Riot made an unsolicited offer in April to acquire Bitfarms for approximately $950 million. Bitfarms rejected the offer, arguing that it significantly undervalued the company, and subsequently approved a poison pill plan to fend off any hostile takeover attempts.
According to this plan, if any entity acquires more than a 15% stake in the company between June 20 and September 10, Bitfarms will issue additional shares to other stockholders, thereby diluting the acquiring entity’s stake.
Riot contended that the 15% trigger “is in direct conflict with established legal and governance standards.”
“We will continue to push to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say on the company’s path forward,” said Riot CEO Jason Les.
Bitfarms did not immediately respond to a request for comment from Reuters.
In a separate regulatory filing, Riot disclosed that it had increased its stake in Bitfarms to 13.1% from 12% earlier this month, making it the largest shareholder in Bitfarms according to LSEG data.
Both Riot and Bitfarms have seen their shares drop significantly this year, with declines of 35% and 19%, respectively, despite a surge of optimism in the crypto industry following the approval of exchange-traded funds tied to the spot price of bitcoin.
