Riot Platforms, a prominent company in the cryptocurrency industry, has made a significant move by acquiring a 9.25% stake in Bitfarms. This comes after Bitfarms rejected Riot’s takeover offer. The details were revealed in a press release issued by Riot Platforms on May 28.
Riot had proposed a buyout price of $2.30 per share, which represented a 24% premium over Bitfarms’ average share price for the past month. It also offered a 20% premium over Bitfarms’ share price on April 19, the day before Riot initially made its proposal. The deal would have consisted of a combination of cash and Riot common stock, potentially giving Bitfarms’ shareholders up to 17% ownership in the combined company.
However, despite the attractive offer, Bitfarms’ board turned it down without engaging in meaningful discussions. This decision, coupled with a lawsuit filed by Bitfarms’ former CEO, has raised concerns about the board’s commitment to the best interests of all shareholders.
In response, Riot Platforms decided to acquire a 9.25% stake in Bitfarms, thereby becoming its largest shareholder. The move is seen as a strategic step by Riot to assert its influence and ensure that the interests of Bitfarms’ shareholders are protected.
Looking ahead, Riot plans to requisition a Special Meeting of Bitfarms’ shareholders after the company’s Annual General and Special Meeting on May 31, 2024. The purpose of this meeting is to introduce new independent directors to the Bitfarms Board. By doing so, Riot believes that a combination of Bitfarms and itself would create the leading publicly listed Bitcoin miner globally, with operations spread across different geographical locations and well-positioned for long-term growth.
Riot’s Executive Chairman, Benjamin Yi, expressed his optimism about the potential merger, stating that it would establish a dominant force in the cryptocurrency mining industry. Meanwhile, Riot’s CEO, Jason Les, voiced concerns about the recent termination of Bitfarms’ CEO and questioned the actions of the company’s founders, suggesting that they may not be acting in the best interests of all Bitfarms shareholders.
The developments surrounding Riot Platforms and Bitfarms have attracted significant attention within the cryptocurrency community, and many are closely following the outcome of this ongoing saga.