Bitcoin mining leader Riot Platforms has taken a new approach in its attempt to acquire rival Bitfarms, launching a website and nominating new board members to push for improved corporate governance at the Canadian company. This significant shift in strategy marks an escalation in the ongoing saga between the two industry players.
Campaign for Change: “A Better Bitfarms”
Riot Platforms unveiled a dedicated website, “ABetterBitfarms.com,” aimed at convincing Bitfarms shareholders to support its plan for a boardroom shakeup. The website outlines alleged governance failures at Bitfarms and proposes a slate of new leadership to address these concerns.
According to a Riot press release, the goal is to reconstitute the Bitfarms board and pave the way for productive dialogue regarding a potential merger. To achieve this, Riot Platforms has nominated three independent directors: John Delaney, a former Jacksonville mayor; Amy Freedman, ex-CEO of Kingsdale Advisors; and Ralph Goehring, a former energy sector CFO.
Riot believes these nominees will bring much-needed expertise and fresh perspectives to Bitfarms. This move comes after Riot withdrew its initial $2.30 per share acquisition offer, opting instead to focus on securing board seats and influencing Bitfarms’ direction.
Rio Platforms’ Frustration Fuels Change in Strategy
The new approach follows Riot’s earlier $950 million acquisition proposal for Bitfarms, which was ultimately rejected. Unhappy with what it perceives as poor governance hindering productive discussions, Riot Platforms is now pushing for leadership changes to ensure a serious discussion about the merger can take place.
Riot’s Investment Trust, a significant shareholder holding a 15% stake in Bitfarms, has been vocal about the need for board changes to unlock shareholder value and advance potential merger talks.
Bitfarms Refutes Claims
Bitfarms, however, has strongly objected to Riot’s merger proposal, claiming it undervalues the company and doesn’t serve the best interests of shareholders. The company further accuses Riot Platforms of undermining its strategic review process by acquiring additional Bitfarms shares in the open market, allegedly to harm Bitfarms’ interests.
Bitfarms also disputes Riot’s accusations regarding governance issues, claiming they are hypothetical and serve Riot’s agenda to acquire Bitfarms at a discounted price. The company points to independent rating organizations like Institutional Shareholder Services (ISS) and Glass Lewis, which reportedly view Riot’s governance structure as riskier than Bitfarms’.
Seeking Shareholder Support
Riot Platforms previously called for a special Bitfarms shareholders’ meeting to discuss governance changes, including the removal of Chairman Nicolas Bonta and director Andrés Finkielsztain. The meeting will also address the appointment of Riot’s proposed new directors.
Riot has consistently criticized the current Bitfarms leadership, accusing them of failing to maximize shareholder value and hindering productive merger talks. The company believes new leadership is critical to fostering a constructive environment for acquisition discussions.
The future of the potential merger hinges on the outcome of the upcoming shareholders’ meeting and the decisions made by the Bitfarms board. With both companies holding firm to their positions, the battle for control of Bitfarms promises to be a closely watched event in the ever-evolving Bitcoin mining industry.
Also Read: Bitcoin On Top With145.9% Annualized Rate of Return
