3 months ago
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In its takeover bid, Riot proposed that it would help Bitfarms’ shareholders to capitalize on the potential for future value creation.
Prominent Bitcoin mining company Bitfarms and North American firm Riot Platforms, are engaged in a battle for the ownership of the former, attracting the attention of the digital asset sector.
Riot Platforms initiated a takeover of Bitfarms earlier in May for a whopping $950 million after the private offer in April that was disapproved by the board of directors at Bitfarms. Interestingly, the two firms have been engaged in talks over the hostile takeover plans of the Colorado-based Riot Platforms.
The buyout offer from Riot was based on the one-month volume-weighted average share price as of May 24, 2024. Notably, the Canada-based Bitcoin miner, Bitfarms, was not happy with the attempt, as the stakeholders refrained from forfeiting more than 15% of their stake in the company.
In a post on social media platform X (formerly known as Twitter), Bitframs noted that its “Board is committed to maximizing shareholder value & continues to welcome Riot in strategic alternatives review”, while adding that “Riot’s interests are not aligned with BITF shareholders & their attacks are efforts to push their low-ball bid”.
In a statement, Bitfarms has accused Riot of initiating a hostile takeover by acquiring “common shares of the Company in the open market in an attempt to undermine the integrity of the process and harm the interests of the Company”.
The North American Bitcoin miner accused Riot of hindering its Strategic Alternatives Review Process and forcing the company to move in a direction that does not do justice to the stakeholders.
Bitfarms claims that Riot “has not acted in good faith” and is looking to bypass the board review process for its offer. The battle between the two firms has forced the digital asset sector to take sides, with many crypto enthusiasts coming in support of Bitfarms, terming Riot’s takeover attempts as “absolute garbage”.
A Hostile Takeover
Bitfarms stated that Riot is focused only on acquiring the Bitcoin miner at a discounted price, adding that if the company is “passionate about corporate governance as it so purports, Riot should focus on its own Board”.
“Attacking Bitfarms’ governance is not only hypocritical, but it is a thinly veiled ploy to achieve Riot’s own self-serving agenda and attempt to acquire Bitfarms at a discounted price,” said Bitfarms.
In its takeover bid, Riot proposed that it would help Bitfarms’ shareholders to capitalize on the “potential for future value creation through participation in a financially and commercially stronger company with a well-defined strategy, led by an established and proven management team.”
The shares of the two companies went significantly up in the past 24 hours. According to the data from Google Finance, Riot Platforms’ shares, which are listed on Nasdaq, were up 6.51%, while Bitfarms’ shares listed on the Toronto Stock Exchange increased by 7.42%.
An X user stated that he sold his RIOT shares for another miner’s shares because aggression to takeover Bitfarms “seems desperate”, adding that “something is breaking over there”.
