Riot Platforms CEO Challenges Bitfarms Over Potential Takeover Approach
Summary:
Riot Platforms CEO, Jason Les, contests Bitfarms' proposed plan to thwart the acquisition of more than a 15% stake amid corporate takeover plans. Riot disclosed its purchase of approximately six million Bitfarms shares, increasing its stake to 13.1%. Bitfarms' plan implies a 'poison pill' strategy to delay Riot's takeover by reducing its shares' value. Les deems this plan contradictory to standard legal and governance norms.
Riot Platforms' CEO, Jason Les, has voiced his objection to a proposed scheme by Bitfarms to obstruct the company from gaining more than a 15% ownership stake as part of a business takeover endeavor. Revealed on June 11 in a document submitted to the U.S. Securities and Exchange Commission, Riot disclosed the procurement of approximately six million ordinary Bitfarms shares via three distinct transactions. At the time of buying, these shares, which together with Riot's prior acquisitions positioned the company with a 13.1% holding in Bitfarms, were valued at over $111 million. A day earlier, Bitfarms had revealed a shareholder rights scheme implying a 'poison pill' ploy to thwart a Riot takeover. The strategy is set to impede Riot’s pursuit of a 15% or greater stake in Bitfarms, thereby delaying Riot's initial takeover plans by reducing its shares' value.
On June 12, Les alleged that Bitfarms' proposal contradicts the generally accepted legal and governance criteria by dropping the limit to 15% instead of "the usual 20%." However, Bitfarms asserts the shareholder plan would still allow Riot to go ahead with its takeover bid, in compliance with relevant Canadian securities legislation.
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Riot, which is based in America, made a bid in May to purchase the mining company located in Canada for $950 million. This cost embodies a 24% premium over Bitfarms' volume-weighted average share price over one month as of May 24. Amid the ongoing acquisition plans, Bitfarms' share price on the Nasdaq has surged over 56% in the previous 30 days. In May, an announcement from Bitfarms stated that its ex-CEO, Geoffrey Morphy, would exit the mining firm following a lawsuit filed against the company. In the interim, Nicolas Bonta has assumed the roles of president and CEO until a successor for Morphy is chosen. Les has called for the board to displace Bonta, citing him as directly liable for Bitfarms' shoddy corporate governance methods.
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Published At
6/12/2024 10:08:08 PM
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