Bitfarms Accuses Riot Platforms of Hostile Bitcoin Mining Takeover Attempt
Summary:
An ongoing power struggle is taking place between Canadian Bitcoin mining company Bitfarms and its Colorado-based counterpart, Riot Platforms. Bitfarms accuses Riot of attempting a hostile takeover with a $950 million bid that surpasses Bitfarms' average share price. Bitfarms believes that Riot's intentions are contrary to the interests of their shareholders and claims Riot is disrupting their board to further its takeover bid. A committee of Bitfarms' independent directors deemed Riot's proposal unrealistic and in contrast to the best interests of shareholders.
Two Bitcoin mining firms, Bitfarms of Canada and Riot Platforms based in Colorado, are currently locking horns over a battle of ultimate control. Bitfarms has lodged accusations against Riot Platforms for initiating an aggressive takeover. On May 28, Riot proposed a takeover bid of $950 million that would outstrip Bitfarm's month-long average share price as of May 24, 2024.
However, Bitfarms shareholders expressed dissatisfaction at the idea of ceding anything beyond a 15% stake through this corporate acquisition. In retaliation, Riot confirmed it had bought approximately six million common shares of Bitfarms for $111 million in June. This purchase increased Riot's shares in Bitfarms to 13.1%, a move Bitfarms claimed threatened the honesty of the acquisition process.
Bitfarms stated its belief that Riot’s aims directly contradict those of Bitfarms shareholders. They accuse Riot of launching an assault on Bitfarms’ Board and company governance to favor its lower takeover bid and cause turmoil with the Strategic Alternatives Review Process. There has been no immediate response from Bitfarms to a request for comment by Cointelegraph.
The Bitfarms committee of independent directors, responsible for assessments of unsolicited proposals, decided that the proposal significantly underestimated Bitfarms' value and did not serve shareholders’ best interests. To forestall an uninvited takeover bid from Riot Platforms, Bitfarms executed the shareholder rights plan on June 10.
According to Bitfarms, their counteraction protects shareholders’ best interests and claims Riot aimed to bypass the decision process. Currently, Bitfarms administers 12 Bitcoin mining facilities in four countries: Canada, the United States, Paraguay, and Argentina.
Former CEO Geoffrey Morphy resolved to step down in May, following a lawsuit filed against the mining firm. Nicolas Bonta stepped up as interim president and CEO while the search for Morphy's successor continues. Calls for Bonta's removal from the board have also emerged due to allegations of his direct culpability for Bitfarms' alleged poor corporate governance practices.
Published At
6/13/2024 10:50:18 AM
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