A fierce battle for control is underway between two Bitcoin mining companies, as Canadian Bitcoin miner Bitfarms accuses Colorado-based Riot Platforms of launching a hostile takeover bid.
In a bold move on May 28, Riot Platforms put forward a buyout offer of $950 million, based on Bitfarms’ average share price over the past month as of May 24, 2024. However, Bitfarms shareholders were not pleased with the prospect of giving up more than 15% of their ownership in the company through a corporate takeover. Shortly after, Riot made a significant move by purchasing around six million common shares of Bitfarms for $111 million.
Expanding on their initial investment, Riot now holds a 13.1% stake in Bitfarms, a move that Bitfarms condemned as an effort to disrupt the acquisition process. Despite requests for comments, Bitfarms did not respond to Cointelegraph’s inquiries.
In response to Riot’s advances, Bitfarms’ special committee, comprised of independent directors, concluded that the buyout offer significantly undervalues the company and is not in the best interest of shareholders. Consequently, on June 10, Bitfarms implemented a shareholder rights plan to safeguard against any unwelcome takeover attempts by Riot Platforms.
With operations in four countries including Canada, the United States, Paraguay, and Argentina, Bitfarms runs 12 Bitcoin mining facilities. In a recent development, the company’s former CEO, Geoffrey Morphy, announced his resignation after filing a lawsuit against Bitfarms. Nicolas Bonta has stepped in as the interim president and CEO until a permanent replacement for Morphy is appointed. Calls have been made for Bonta’s removal by some board members, citing concerns over corporate governance practices.
Amidst this power struggle, it’s clear that the battle for control between Bitfarms and Riot Platforms is far from over, with both sides vying for dominance in the competitive Bitcoin mining industry.