A fierce battle for control is unfolding between two Bitcoin mining companies, as Canadian Bitcoin miner Bitfarms accuses Colorado-based Riot Platforms of launching a hostile takeover bid.
Riot Platforms made an initial offer of $950 million on May 28, based on Bitfarms’ average share price over the past month as of May 24, 2024. However, Bitfarms shareholders were not pleased with the idea of giving up more than 15% of their ownership in a potential takeover. In response, Riot purchased around six million common shares of Bitfarms for $111 million in June, increasing their stake in the company to 13.1%.
Bitfarms condemned this move, labeling it as an attempt to disrupt the acquisition process. The company’s special committee, made up of independent directors, reviewed Riot’s proposals and concluded that they significantly undervalued Bitfarms and were not in the best interest of shareholders. To safeguard against any unwanted takeover attempts by Riot, Bitfarms implemented a shareholder rights plan on June 10.
Bitfarms argued that their actions were aimed at protecting the interests of their shareholders and accused Riot of trying to bypass the decision-making process. Meanwhile, Bitfarms has been operating 12 Bitcoin mining facilities across Canada, the United States, Paraguay, and Argentina. In a recent development, former CEO Geoffrey Morphy stepped down after suing the mining firm, with Nicolas Bonta serving as interim president and CEO until a permanent replacement is found.
The ongoing power struggle between Bitfarms and Riot Platforms highlights the high-stakes competition within the Bitcoin mining industry.