CoinWorld reported:
Bitcoin
Mining giant Riot Platforms appears to have achieved a significant victory on Monday in its months-long attempt to forcibly acquire Canadian competitor Bitfarms, as the two companies announced a settlement agreement that includes the nomination of an executive personally selected by Riot to join the Bitfarms board.
Earlier this year, Riot attempted to acquire Bitfarms for $950 million. However, the Bitfarms board rejected the offer, claiming it was undervalued. Since then, Riot has steadily increased its stake in Bitfarms, attempting a hostile takeover, a strategy that has resulted in its current ownership of approximately 20% of the Canadian company.
In June, Riot pushed to replace several Bitfarms board members with individuals who might be more amenable to the acquisition. According to today’s settlement agreement, one of the candidates, former banker and corporate advisor Amy Friedman, will now join the Bitfarms board. She will also join Bitfarms’ governance, nomination, and compensation committee.
Bitfarms co-founder Andrés Finkielsztain has resigned from the board.
Although this move does not constitute a complete victory for Riot—the company has not yet secured control over Bitfarms—it does signify a step in the desired direction. Under today’s settlement agreement, Riot will also be granted certain rights to purchase additional Bitfarms shares, provided its ownership remains above 15%.
Riot CEO Jason Les stated in a release, “This agreement is an important step for both of our companies in advancing shareholder value creation, and we are pleased to have reached this constructive resolution with Bitfarms.” He added, “As the largest shareholder of Bitfarms, we look forward to supporting the restructured Bitfarms board and continuing to engage with management.”
While Bitfarms seems to have made a strategic concession to Riot today, the smaller company has been actively seeking alternative ways to avoid a hostile takeover in recent weeks. At the end of last month, the company acquired another cryptocurrency mining firm, Stronghold Digital Mining, a move that experts believe could enhance Bitfarms’ valuation, making Riot’s acquisition less feasible.
However, Bitfarms’ stock price fell nearly 16% last month to $2.06, despite a nearly 3% increase on that day. Riot’s stock also experienced a similar trend, declining 14% over the past month, but rising 2% so far on Monday.
Editor: Andrew Hayward