Riot Puts Forward Three New Directors for the Board of Bitfarms in Attempt to Take Control
Hassan Shittu
Last updated:
June 24, 2024 19:16 EDT
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2 min read
Riot Platforms has officially called for a special meeting of Bitfarms shareholders on June 24, with the intention of overhauling the current Board of Directors. Riot claims that the current board has not fulfilled its corporate governance duties and failed to maximize shareholder value.
Shareholders will have the opportunity to vote on the removal of Chairman Nicolas Bonta and Director Andrés Finkielsztain, and to fill the vacancy left by co-founder Emiliano Grodzki.
Riot Calls for Change at Bitfarms, Requests Special Meeting to Oust Board Members
Riot has cited several reasons for the need to change the board at Bitfarms, including the mishandling of CEO succession, inadequate responses to acquisition proposals, and the implementation of a shareholder rights plan without sufficient shareholder support.
“The current board’s resistance to engage constructively has impeded progress and underscores the urgent need for change,” the announcement stated.
Riot, the largest shareholder of Bitfarms with approximately 14.9% stake, has nominated three independent directors for election to the Bitfarms Board. These nominees are John Delaney, Amy Freedman, and Ralph Goehring, who are described as highly qualified and possessing extensive experience in corporate governance, public company oversight, and strategic transactions.
Riot emphasized that each nominee was entirely independent of both Riot and Bitfarms, and would bring fresh perspectives to the boardroom.
“We believe new, independent voices are essential to ensuring Bitfarms’ board acts in the best interests of shareholders,” the announcement read.
In addition, Riot has withdrawn its previous proposal to acquire Bitfarms for US$2.30 per share, citing the Bitfarms Board’s lack of meaningful engagement in negotiations.
The relationship between Riot and Bitfarms has become increasingly strained following Bitfarms’ implementation of a shareholder rights plan, known as a “poison pill,” with a trigger threshold set below standard governance norms. Riot has openly criticized this move, arguing it undermines shareholder rights and reflects a board unwilling to prioritize shareholder interests.
Bitfarms Faces Pressure as Shareholders Prepare for Special Meeting
Bitfarms, under pressure from Riot and discontent among shareholders, has yet to formally respond to Riot’s requisition. The upcoming Special Meeting, anticipated within 21 days per regulatory requirements, will allow Bitfarms shareholders to vote on Riot’s proposed board changes.
Riot emphasized that the move comes after extensive efforts to constructively engage Bitfarms’ board on strategic matters, including a proposed merger between Riot and Bitfarms. According to Riot, the current board’s response, including implementing a shareholder rights plan, has hindered progress and highlighted the need for new leadership.
Despite Riot’s initiative, Bitfarms and Riot saw declines in share prices, dropping nearly 7% and 2%, respectively, following the announcement.
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