Bitfarms Rebuts Riot’s $950M Takeover Bid

A significant clash over ownership is currently unfolding between two Bitcoin mining giants. Canadian-based Bitfarms is accusing Riot Platforms, a company headquartered in Colorado, of trying to execute a hostile takeover. This contention began when Riot Platforms made a $950 million offer on May 28, aiming to buy Bitfarms at the one-month volume-weighted average share price calculated as of May 24, 2024. Bitfarms’ stakeholders were dissatisfied with the proposal, particularly because it involved surrendering over 15% of their stake as part of the acquisition.

Following the rejected bid, Riot Platforms moved forward by purchasing approximately six million Bitfarms common shares in June, costing them around $111 million. This acquisition increased Riot’s stake in Bitfarms to 13.1%. Bitfarms interpreted this maneuver as an attempt to disrupt the acquisition process, describing it as detrimental to their shareholders’ interests.

Bitfarms publicly criticized Riot for not acting in good faith during the acquisition process. According to a statement from Bitfarms, Riot’s actions are seen as misaligned with the interests of Bitfarms shareholders. They allege that Riot is trying to force a “low-ball bid” and tampering with the ongoing Strategic Alternatives Review.

Despite requests for comment, Bitfarms did not offer any immediate response to queries from . The special committee at Bitfarms, composed of independent directors, thoroughly reviewed Riot’s proposal and concluded that it heavily undervalues Bitfarms. The committee asserted that the offer is not in shareholders’ best interests.

In an effort to thwart Riot’s unsolicited takeover attempt, Bitfarms enacted a shareholder rights plan on June 10. This move was aimed at protecting the company’s integrity and ensuring that any acquisition would fairly benefit its shareholders. Bitfarms maintained that their defensive strategies were essential, insisting that Riot’s actions sought to shortcut any deliberative processes they had in place.

Bitfarms is a significant player in the Bitcoin mining industry, operating 12 facilities spread across Canada, the United States, Paraguay, and Argentina. In May, Bitfarms faced another internal conflict when their then-CEO, Geoffrey Morphy, decided to step down and subsequently filed a lawsuit against the company.

Currently, Nicolas Bonta is serving as the interim president and CEO of Bitfarms while a search for a permanent replacement is underway. Les, an involved party, criticized Bonta’s management, accusing him of being directly responsible for what he described as Bitfarms’ poor corporate governance practices. This accusation adds another layer of complexity to the already convoluted situation.

With tensions escalating, the future ownership and direction of Bitfarms remain uncertain. As the battle unfolds, shareholders and industry watchers alike are eager to see how Bitfarms will navigate these turbulent waters and whether Riot Platforms will intensify its efforts to gain control.