Riot Platforms, which has been attempting a takeover of Canadian mining firm Bitfarms, said it plans to replace three members of the company’s board of directors.
In a June 24 notice, Riot said it held a roughly 14.9% stake in Bitfarms after the mining firm announced a shareholder rights plan to prevent it from acquiring more than 15% of its stock. Rather than continue purchasing Bitfarm shares, Riot planned to replace three of the company’s board members and “remove any additional director” appointed after its announcement.
“[It] is clear that engaging with the incumbent Bitfarms Board on a potential combination is just not possible,” said Riot. “Riot has informed the Bitfarms Board that it has formally withdrawn its previous proposal to acquire all Bitfarms common shares at a price of US$2.30 per share and stands ready to engage and negotiate with a reconstituted Bitfarms Board to pursue a mutually beneficial combination of Bitfarms and Riot.”
The mining firm intended to replace the board members with three people “completely independent of Riot and Bitfarms” — John Delaney, Amy Freedman and Ralph Goehring. Bitfarms’ stock price on the Nasdaq has increased more than 36% in the last 30 days amid the takeover plans but dropped roughly 6% in the previous 24 hours.
“The Special Committee is disappointed that Riot declined to engage constructively and participate in the process, and instead has continued to take steps to attempt to undermine the integrity of the process and harm the interests of other Bitfarms shareholders,” Bitfarms said in a statement shared with Cointelegraph. “The Board and Special Committee remain committed to achieving the best outcome for all Bitfarms shareholders.”
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The mining firm claimed that Bitfarms’ board had been “unwilling to engage constructively” regarding the takeover and said the company had “botched its CEO succession process.” Former Bitfarms CEO Geoffrey Morphy stepped down in May after filing a lawsuit against the firm. Nicolas Bonta has been acting as the interim president and CEO — but could be removed as one of the three board members if Riot’s appeal to shareholders is successful.
The plan to overhaul the Bitfarms’ board was the latest development in Riot’s plans to move in on Bitfarms. In May, Riot offered to acquire the mining firm for $950 million and began increasing its stake until Bitfarms implemented its ‘poison pill’ strategy, capping any holdings at 15%.
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Update (June 24 at 7:22 pm UTC): This article has been updated to include a statement from Bitfarms.
