A fierce battle for ownership is unfolding between Canadian Bitcoin miner Bitfarms and Colorado-based Riot Platforms. Riot Platforms announced a $950 million takeover offer on May 28. The offer was based on Bitfarms’ volume-weighted one-month average share price as of May 24, 2024. However, Bitfarms stakeholders were unhappy about giving up over 15% of their stake in a corporate takeover.
Riot Acquires Significant Stake in Bitfarms
In June, Riot Platforms bought approximately six million Bitfarms common shares for $111 million, increasing its stake to 13.1%. Bitfarms viewed this move as an attempt to undermine the acquisition process, stating Riot’s interests are misaligned with those of Bitfarms shareholders. It accused Riot of attacking its board and governance to push a low-ball bid and disrupt the Strategic Alternatives Review Process.
Bitfarms’ Response to the Hostile Takeover Attempt
On June 10, Bitfarms adopted a shareholder rights plan to prevent an unsolicited takeover bid from Riot Platforms. Bitfarms’ special committee, composed of independent directors, rejected Riot’s proposal, deeming it significantly undervalued and not in the best interest of shareholders. The company asserted that Riot intended to “short circuit” the decision-making process.
Furthermore, Bitfarms operates 12 Bitcoin mining facilities in Canada, the United States, Paraguay, and Argentina. In May, former CEO Geoffrey Morphy stepped down after filing a lawsuit against the firm. Nicolas Bonta has been acting as interim president and CEO.
Riot called for Bonta’s removal, blaming him for Bitfarms’ poor corporate governance practices. The clash between the two mining giants continues to escalate, with both sides determined to assert their control.
Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.