Bitcoin
Bitcoin Miner Riot Tries to Eliminate Bitfarms Board as Hostile Takeover Bid Fails
Bitcoin Mining giant Riot announced today that it will abandon a months-long effort to carry out a hostile takeover of Canadian mining company Bitfarms – at least for now.
Due to Bitfarms’ continued opposition to the plan and apparently successful implementation of the so-called “poison pill” of defending shareholder rights against forced takeover, Riot said on Monday that it has withdrawn its offer to acquire Bitfarms for US$ 2.30 per share.
Instead, the American mining giant will now direct its efforts to purging Bitfarms’ leadership in an attempt to shake up the company and install directors more receptive to a potential deal – or, as Riot euphemistically put it this morning, those who have “new perspectives.”
“Riot continues to believe that a combination of Bitfarms and Riot will create the world’s leading and largest publicly traded Bitcoin miner,” Riot said in a statement today. “However, it is clear that it is simply not possible to engage with the current Bitfarms board on a potential combination.”
Decrypt reached out to representatives from Riot and Bitfarms, but did not immediately receive a response from either company.
Riot currently owns 14.9% of Bitfarms’ common shares, making it easily Bitfarms’ largest shareholder. In April, Riot reportedly approached Bitfarms with an acquisition offer, but it was quickly rejected, with the latter company dismissing the offer as extremely low.
Riot then took a more aggressive approach, accumulating a 9.25% equity stake in Bitfarms through stock purchases, and publicly announcing its plans to acquire the company by hook or by crook.
Things got more complicated in the following weeks, with Riot buying more Bitfarms shares, Bitfarms announcing a planned expansion in the United States for the first time, and Bitfarms fired its CEO, Geoffrey Morphy, after Morphy filed a $27 million lawsuit against the company alleging breach of contract.
Riot today seized on the narrative that Bitfarms’ operations have recently devolved into chaos, painting Bitfarms’ current leadership as selfish and out of touch.
“Riot is confident that it is not alone in believing that Bitfarms’ corporate governance is broken and that the status quo cannot continue,” Riot said today.
Riot called a special shareholder meeting to vote on replacing the current Bitfarms board with three alternatives: John Delaney, the former mayor of Jacksonville; Amy Freedman, former investment banker and corporate consultant; and energy sector executive Ralph Goehring.
In Monday’s news, Bitfarms shares are down nearly 9% to $2.68 at the time of writing. Riot fell nearly 4% to $9.22.
Edited by Andrew Hayward