Riot Platforms has made the decision to abandon its bid to acquire rival Bitfarms and instead focus on overhauling Bitfarms’ Board of Directors. The company has formally requested a special meeting of Bitfarms shareholders to restructure the board by removing Bitfarms’ Chairman and Interim CEO Nicolas Bonta and director Andrés Finkielsztain. The final decision will be made via a shareholder vote, which will also determine the removal of anyone appointed to fill the vacancy left by co-founder Emiliano Grodzki, who was recently removed from the board.
Riot stated that the move to overhaul the board is necessary due to stalled negotiations with Bitfarms’ current board. The company believes that the current board’s culture is founder-driven and prioritizes the interests of individual directors over what is best for Bitfarms and its shareholders. Riot is nominating John Delaney, Amy Freedman, and Ralph Goehring to replace the current Bitfarms board members. It is important to note that these nominees are not receiving any compensation or financial benefits from Riot or its advisors related to their nominations.
Riot had initially attempted to acquire Bitfarms in April for approximately $950 million, but Bitfarms rejected the unsolicited offer stating that it significantly undervalued the company. Since the deal fell through, Riot has been steadily purchasing Bitfarms stock and has become its largest shareholder with a 14.9% stake in the miner. Riot has expressed its readiness to discuss a potential acquisition with a reconstituted Bitfarms board but has withdrawn its previous offer of $2.30 per share.
In summary, Riot Platforms has decided to shift its focus from acquiring Bitfarms to overhauling its Board of Directors. The company believes that the current board’s culture is founder-driven and not in the best interest of Bitfarms and its shareholders. Riot has nominated new board members to replace the current ones and is prepared to discuss a potential acquisition with a reconstituted board. It will be interesting to see how this situation unfolds and how it will impact both Riot and Bitfarms in the future.
