The cryptocurrency mining industry is witnessing a high-stakes battle between Bitfarms and Riot Platforms. Bitfarms, a Canadian-based Bitcoin miner, has recently adopted a shareholder rights plan in response to Riot’s attempted hostile takeover. This strategic move aims to complicate Riot’s efforts, though it may not necessarily prevent the takeover from ultimately succeeding.
Bitfarms’ Shareholder Rights Plan
The shareholder rights plan, passed after Bitfarms’ recent Annual General and Special Meeting, introduces a set of constraints that Riot must navigate. According to the plan, if a person (or associated persons) accumulates a 15% stake in Bitfarms by September 20th and then increases their holding to 20% without board approval, other shareholders will be able to purchase Bitfarms’ common shares at a significant discount to the market price at that time. This process would dilute the potential acquirer’s share, making a successful takeover more challenging.
The Ongoing Battle Between Bitfarms and Riot
The current situation has been characterized by a back-and-forth between the two companies. Bitfarms has stated that it “welcomed” Riot’s initial takeover proposal but believed the offer undervalued the company’s shares. Riot, on the other hand, accused Bitfarms’ board of rejecting the proposal without engaging in substantive dialogue.
Notably, Riot has already increased its stake in Bitfarms from 3.61% to 11.62% by the time of Bitfarms’ shareholder meeting. This strategic move allowed Riot to question whether Bitfarms co-founders Emiliano Grodzki and Nicholas Bonta were acting in the best interests of all shareholders. As a result, Grodzki failed to retain his board seat in the election.
Riot’s Continued Efforts
Despite the adoption of the shareholder rights plan, Riot has not given up on its takeover ambitions. The company had intended to requisition an additional shareholders meeting to add more members to the Bitfarms board. Bitfarms, however, has described this proposed meeting as part of Riot’s “efforts to circumvent and frustrate” its board’s review process to consider the sale of the company.
The ongoing battle between Bitfarms and Riot highlights the dynamic and competitive nature of the cryptocurrency mining industry. As the two companies navigate this high-stakes situation, the outcome will undoubtedly have significant implications for the broader crypto landscape.
Conclusion
The cryptocurrency mining industry is witnessing a fierce battle between Bitfarms and Riot Platforms. Bitfarms’ adoption of a shareholder rights plan aims to complicate Riot’s hostile takeover attempt, though it may not entirely prevent the acquisition from succeeding. The strategic moves and counter-moves between the two companies demonstrate the intensity of the competition and the high stakes involved in the cryptocurrency mining space.
