After months of the takeover conflict, Bitfarms and Riot Platforms Inc. (NASDAQ: RIOT) have finally reached an agreement that promises a new chapter for both of them. The saga began earlier this year when Riot Platforms made an unsolicited move to acquire Bitfarms.
According to reports, the Bitcoin mining company offered to purchase all its outstanding stock for $2.30 per share — a 24% premium, which is a whopping $950 million. However, members of the Bitfarms board had other plans.
Despite the seemingly generous offer, Bitfarms declined the offer. Nevertheless, Riot didn’t walk away quietly. Instead, the company made a choice to acquire a 9.25% holding in Bitfarms, becoming the largest shareholder in the company. And the company didn’t stop there. Once it acquired more shares, Riot controlled about 20% of Bitfarms. This could be regarded as a quiet statement of intent regarding the company’s plans for Bitfarms.
Even so, the takeover controversy wasn’t just happening in the boardroom; there was some serious legal action happening too. Geoffrey Morphy Bitfarms CEO, was let go after filing a lawsuit against the company for breach of contract. He made a claim of $27 million in damages. On top of everything, in June 2024, Riot attempted to swap out many board members of Bitfarms for individuals potentially more favorable to an acquisition.
The settlement that was announced on Sept. 23, 2024, brought some major changes. To begin with, Andrés Finkielsztain, cofounder of Bitfarms, left the board. In his place, Amy Freedman, a banker and corporate advisor, was appointed to Bitfarms’ board of governance. While the settlement doesn’t mean Riot is taking over Bitfarms just yet, it does allow the company to keep buying more stock provided it holds at least 15% of the company.
Following the settlement, both companies believe that the future looks bright. Riot CEO Jason Les shared that the agreement represented a major step toward advancing stockholder value creation and looked forward to ongoing engagement with the management of Bitfarms. Brian Howlett, Bitfarms independent chairman, reiterated these feelings, saying the deal met the shareholders’ interests at its core.
However, let’s not forget that Bitfarms is still standing firm against a full-blown takeover. The company recently acquired Stronghold Digital Mining, a step designed to boost the company’s valuation and make a takeover even trickier for Riot to pull off.
While this settlement seems positive, both companies are up against hurdles. Riot and other major Bitcoin miners, including Marathon Digital, have been struggling with dropping revenues as well as widening losses. With the industry navigating the post-halving environment, it’s clear that these mining giants have bigger challenges ahead.
At the end of the day, this is one chapter in an ongoing saga. You might want to stay tuned and watch how Riot and Bitfarms navigate their next moves in the turbulent world of Bitcoin mining.
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