Riot Platforms Steps Up Efforts to Acquire Bitfarms: A Closer Look
Riot Platforms has recently made a bold move in its efforts to acquire rival Bitcoin miner Bitfarms by issuing an open letter to the firm’s shareholders on September 3rd. In the letter, Riot announced that it had adjusted its request for board seats at Bitfarms to two independent directors following recent board changes, while also highlighting some key criticisms of the company’s recent decisions.
One major point of contention raised by Riot was Bitfarms’ acquisition of Stronghold, a deal valued at $175 million. Riot expressed concerns about the high premium paid for Stronghold, which amounted to over 100% compared to the company’s closing share price the day before the announcement. The firm pointed out that no other industry player was willing to pay such a steep price for Stronghold, which had been on the market for a significant period of time. Riot argued that the deal was not in the best interests of Bitfarms shareholders and urged the company not to pursue any further financing transactions until after the upcoming special meeting in October.
In terms of proposed board changes, Riot had initially requested three seats on Bitfarms’ board but reduced this to two following progress in addressing the company’s founder-led board culture. Riot has put forward Amy Freedman and John Delaney as candidates to replace two existing directors, co-founder Andres Finkielsztain and Fanny Philip. Riot highlighted concerns about Finkielsztain’s role in Bitfarms’ troubled CEO succession process, which has seen five CEOs in as many years. The company assured that its nominees are entirely independent and bring valuable public company board experience, corporate governance oversight, and transaction expertise to the Bitfarms board.
Bitfarms has experienced broader leadership changes in recent months, including the resignation of co-founder and chairman Nicolas Bonta and the earlier departure of another co-founder, Emiliano Grodzki. These developments have set the stage for a potential shakeup in the company’s governance structure, with Riot Platforms pushing for greater influence through its proposed board changes.
Overall, Riot Platforms’ efforts to acquire Bitfarms have intensified in recent weeks, with the company making strategic moves to address key concerns and position itself for a potential takeover. The upcoming special meeting in October will be a crucial turning point for both companies as they navigate the complex landscape of the cryptocurrency mining industry.