For Bitcoin (BTC-USD) miner Bitfarms (TSE:BITF) (BITF), the plan to fend off Riot Platforms (RIOT) with a so-called “poison pill” move might have been all that stood between Bitfarms and a takeover. But now, that move has been pushed down by the Ontario Capital Markets Tribunal, and the market is left to pick up the pieces. It didn’t seem to object too hard, though, as Bitfarms shares were down fractionally in Thursday morning’s trading.
It all started when Riot put out a C$1.3 billion offer to buy Bitfarms. But Bitfarms didn’t much care for that notion, and turned to the poison pill strategy, evaluating offers from other firms to prevent Riot from seizing control in the first place.
That’s when the aforementioned tribunal stepped in and put out a “cease trade” order that prevented Bitfarms from offering up the sale. It was reportedly considering a 15% trigger for it, but the tribunal’s response stopped the action altogether. Now, Bitfarms has rolled out a new “shareholder rights” plan that will “…ensure that all of its shareholders are treated fairly and equally in connection with any unsolicited takeover bid.”
Meet the New Pill, Legally Distinct from the Old Pill
Bitfarms isn’t giving up on the poison pill. In fact, the new rights plan turns to a strategy known as “creeping bids.” Effective for six months, it requires buyers to gradually pick up 20% or more through purchases that don’t fall under takeover bid rules. If that happens, current stockholders are allowed to buy in at a discount, and that, in turn, thins out the acquiring party’s stock of shares. Whether or not the tribunal will ultimately allow this development to go through, meanwhile, remains to be seen.
Is Bitfarms Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Bitfarms stock based on six Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 54.66% rally in its share price over the past year, the average Bitfarms price target of C$5.86 per share implies 63.62% upside potential.
