Bitfarms Resists Riot’s $950M Takeover Bid

Bitfarms’ stakeholders and special committee reject Riot’s $950 million buyout offer, claiming it undervalues the company and is not in shareholders’ best interests.

A heated battle for control is underway between two Bitcoin mining companies. Canadian miner Bitfarms is accusing Colorado-based Riot Platforms of a hostile takeover attempt.

Riot Platforms initially proposed a $950 million buyout on May 28, based on Bitfarms’ one-month volume-weighted average share price as of May 24, 2024.

Bitfarms stakeholders, however, were unhappy with the prospect of giving up over 15% of their stake in the company. Following this, in June, Riot purchased approximately six million Bitfarms common shares for $111 million.

This acquisition increased Riot’s holding to a 13.1% stake in Bitfarms. Bitfarms claimed this move was “an attempt to undermine the integrity of the acquisition process.” Bitfarms stated:

“It is clear that Riot’s interests are not aligned with those of Bitfarms shareholders. Instead of participating in the Special Committee’s process in good faith, Riot is attacking Bitfarms’ Board and corporate governance to push its low-ball bid and disrupt the Strategic Alternatives Review Process.”

Bitfarms did not immediately respond to Cointelegraph’s request for comment. Riot Platforms CEO, Jason Les, addressed the concerns and allegations, saying:

“We have attempted to privately engage with the Bitfarms Board and recently sent two letters urging constructive collaboration, proposing the addition of at least two new directors who are fully independent of Bitfarms and Riot. Instead of engaging with us privately and in good faith, Bitfarms implemented an off-market Poison Pill with a trigger well below the customary 20% threshold.”

Les added that Riot Platforms “will continue to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say in the company’s future.”

Bitfarms’ special committee, composed of independent directors, reviewed Riot’s unsolicited proposal and concluded that it significantly undervalued Bitfarms and was not in the best interest of shareholders.

On June 10, Bitfarms adopted a shareholder rights plan to prevent an “unsolicited takeover bid” from Riot Platforms.

Bitfarms argued that its response was in the best interest of shareholders and accused Riot of trying to “short circuit” the decision-making process.

Bitfarms operates 12 Bitcoin mining facilities across Canada, the United States, Paraguay, and Argentina. In May, Bitfarms announced that its former CEO, Geoffrey Morphy, would step down after filing a lawsuit against the company.

Nicolas Bonta has been acting as the interim president and CEO while the company searches for Morphy’s replacement. Les called for Bonta’s removal, claiming he “bears direct responsibility for [Bitfarms’] poor corporate governance practices.”