Bitfarms Ltd., a Bitcoin (available on Coinbase) mining company, is adopting a “poison pill” shareholder rights plan in response to an unsolicited takeover offer from larger rival Riot Platforms Inc.

A poison pill strategy is designed to deter corporate takeovers by making the acquisition too costly for the acquiring company. Under the terms of Bitfarms’ plan, if an entity acquires an equity stake exceeding 15% by September 10, Bitfarms will issue new stock to existing shareholders, thereby diluting the stake of the entity pursuing the hostile takeover, as stated in a Monday announcement by Bitfarms.

Riot Platforms made an unsolicited offer of $950 million in May to acquire Bitfarms Ltd. following the latter’s rejection of Riot’s takeover bid the previous month. Bitfarms’ board deemed the proposal as significantly undervaluing the company and its growth prospects.

In April, Riot privately proposed $2.30 per share in cash and stock for Bitfarms, which represented a 20% premium over the company’s pre-offer share price.

According to Bitfarms, Riot currently holds 47,830,440 shares, constituting approximately 12% of the issued and outstanding stock. A spokesperson for Riot did not respond immediately to requests for comment.

On Monday, Bitfarms shares declined by 4.2% to $2.30, while Riot’s stock increased by 1.8% to $9.90. Year-to-date, both stocks have experienced declines of around 21% and 36%, respectively.

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