Riot Platforms blocks takeover proposal at Bitfarms; vying for three board seats

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Riot Platforms blocks takeover proposal at Bitfarms; vying for three board seats
Riot Platforms blocks takeover proposal at Bitfarms; vying for three board seats

In an attempt to win three board seats from rival Bitfarms, a long-term acquisition target that has rejected Riot Platforms’ $950 million buyout offer and put in place a poison pill to thwart any hostile takeover attempt, the bitcoin miner Riot Platforms

Bitcoin miner Riot Platforms (RIOT.O) has opened a new tab stating that it is attempting to acquire three board seats from rival Bitfarms (BITF.TO), a long-term acquisition target that has rejected its $950 million purchase offer and implemented a poison pill to prevent any hostile takeover attempt. Riot, the largest Bitfarms shareholder with a nearly 15% interest, withdrew the bid on Monday but declared that it was “ready to engage” over a possible deal with the reconstituted board of the firm. “The Special Committee is disappointed that Riot declined to engage constructively and participate in the process and instead has continued to take steps to attempt to undermine the integrity of the process and harm the interests of other Bitfarms shareholders,” Bitfarms stated in a statement.

Since Riot made an unsolicited bid in April, which Bitfarms claims undervalued the company, and started an assessment of its strategic alternatives, the two companies have been at odds. Earlier this month, Riot charged Bitfarms with having weak corporate governance, which sparked a board dispute. In order to make up for the financial blow that April’s so-called “halving” of Bitcoin dealt to their earnings, cryptocurrency miners are actively seeking out growth prospects. The halving, which occurs approximately every four years to slow down the creation of new bitcoins, halves the rewards that miners receive.

Since Riot made an unsolicited bid in April, which Bitfarms claims undervalued the company, and started an assessment of its strategic alternatives, the two companies have been at odds. Earlier this month, Riot charged Bitfarms with having weak corporate governance, which sparked a board dispute. In order to make up for the financial blow that April’s so-called “halving” of Bitcoin dealt to their earnings, cryptocurrency miners are actively seeking out growth prospects. The halving, which occurs approximately every four years to slow down the creation of new bitcoins, halves the rewards that miners receive.

In order to allow Bitfarm’s shareholders to vote on its three nominations for directors—John Delaney, Amy Freedman, and Ralph Goehring—Riot has summoned and opened a new tab for a special meeting. According to Riot, Freedman is a former investment banker who has assisted boards with corporate governance issues, while Delaney is an authority on government and public affairs. The corporation claims that Goehring is a seasoned CFO with knowledge of finance, accounting, and tax issues. Riot also stated that the three finalists will “assist oversee the strategic alternatives process at Bitfarms” and are independent of both businesses. Bitfarms’ and Riot’s shares decreased by over 9% and 4%, respectively.

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