Bitfarms accuses Riot Platforms of launching a hostile $950M takeover bid amid a battle for ownership in the Bitcoin mining sector.
There is a growing conflict between two Bitcoin mining companies about ultimate ownership.
Bitfarms, a Canadian bitcoin miner, has accused Colorado-based Riot Platforms of trying to seize control hostilely.
Riot Platforms made a $950M takeover offer on May 28 in addition to Bitfarms’ one-month volume-weighted average share price as of May 24, 2024.
Stakeholders in Bitfarms, however, were not happy about giving up more than 15% of their ownership in a corporate buyout.
Riot stated shortly afterward in June that it had paid $111 million for around six million common shares of Bitfarms.
Riot increased their holding in Bitfarms to 13.1% by acquiring this position. This was “an attempt to undermine the integrity of the acquisition process,” according to Bitfarms. Bitfarms stated:
“It is clear that Riot’s interests are not aligned with those of Bitfarms shareholders, and instead of participating in the Special Committee’s process in good faith, Riot is attacking Bitfarms’ Board and corporate governance in an effort to push its low-ball bid and disrupt the Strategic Alternatives Review Process.”
After reviewing the unsolicited approaches, the Bitfarms special committee, which is made up of independent directors, “determined that the proposal significantly undervalues Bitfarms and is not in the best interest of shareholders.”
In order to avert a “unsolicited takeover bid” from Riot Platforms, Bitfarms enacted the shareholder rights plan on June 10.
Bitfarms maintained that Riot attempted to “short circuit” the ruling and that their rebuttal was in the best interests of its shareholders.
Twelve Bitcoin mining facilities are run by Bitfarms across four nations: Argentina, Paraguay, the United States, and Canada.
Following his lawsuit against the mining company, Bitfarms announced in May that Geoffrey Morphy, the company’s former CEO, would be resigning.
Until the business selects a successor for Morphy, Nicolas Bonta has been serving in the capacity of interim president and CEO.
Les stated that Bonta “bears direct responsibility for [Bitfarms’] poor corporate governance practices” and urged the board to terminate him.
