Riot Platforms has made a significant investment in Bitfarms by acquiring a 9.25% stake in the company after its takeover offer was rejected. In a press release issued on May 28, Riot Platforms revealed that its $950 million bid to acquire all outstanding shares of Bitfarms was turned down by the board. Despite this setback, Riot went ahead and purchased a 9.25% stake in Bitfarms, which now makes it the largest shareholder.
Riot’s proposal included a buyout price of $2.30 per share, which represented a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24. It also reflected a 20% premium over Bitfarms’ share price on April 19, the last trading day before Riot made its initial proposal.
The proposal offered Bitfarms’ shareholders a combination of cash and Riot common stock, potentially giving them ownership of up to 17% of the combined company. The press release stated that this proposal provided significant value and potential for future growth.
However, Bitfarms’ board rejected the privately delivered proposal without engaging in meaningful discussions. The recent lawsuit filed by Bitfarms’ terminated CEO also raised concerns about the actions of certain directors and their commitment to the best interests of all shareholders.
In light of these concerns, Riot believes it is necessary to directly communicate its proposal to Bitfarms’ shareholders. After Bitfarms’ Annual General and Special Meeting on May 31, 2024, Riot plans to requisition a Special Meeting of Bitfarms’ shareholders to introduce new independent directors to the board.
Riot’s Executive Chairman, Benjamin Yi, stated that a combination of Bitfarms and Riot would create the leading publicly listed Bitcoin miner globally, with operations in different geographical locations and a strong position for long-term growth.
Riot’s CEO, Jason Les, expressed concerns about the recent termination of Bitfarms’ CEO, Nicolas Bonta, suggesting that Bonta and Emiliano Grodzki, the founders of the company, may not be acting in the best interests of all Bitfarms shareholders.
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