Riot seeks board influence at Bitfarms after failed $950M takeover bid

Bitcoin miner Riot Platforms has called for a special meeting of Bitfarms’ shareholders to vote on its three board director nominees – John Delaney, Amy Freedman, and Ralph Goehring. The move comes two weeks after Bitfarms turned down a potential $950 million hostile takeover bid by rival Riot.

Also read: Riot Platforms report surge in Bitcoin production amid rising revenue

Riot said it withdrew its previous proposal to acquire Bitfarms and was “ready to engage” with a reconstituted board of its competitor about “a potential transaction.” Riot is the largest shareholder in Bitfarms with a 14.9% stake. Earlier, the company offered to buy Bitfarms for $2.30 per share.

Bitfarms says Riot is “harming other shareholders”

In a statement on Monday, Riot said its three nominees, all independent of both companies, will “help to restore shareholders’ confidence in the Bitfarms board.” The firm, which accuses Toronto-based Bitfarms of poor corporate governance, added that the new directors will also “oversee the strategic alternatives process” at the company.

Riot said Delaney is a government and public affairs expert with experience in the public and private sectors. Freedman is a corporate governance and public capital markets expert, and Goehring is a veteran CFO with experience in financial, accounting, and tax issues.

The trio are candidates to replace Bitfarms chairman and interim CEO Nicolas Bonta, director Andrés Finkielsztain, and company co-founder Emiliano Grodzki, who was booted out of the board a few months back.

“…it has become evident to Riot that good faith negotiations simply will not be possible until there is real change in the Bitfarms boardroom,” Riot said. The statement continued, adding, “The culture of the current Bitfarms board is founder-driven, and Riot believes it prioritizes the interests of individual directors over what is best for Bitfarms and its shareholders.”

Also read: Bitfarms CEO steps down amid intensifying legal dispute

In response, Bitfarms said in a statement that it “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.”

Both companies have criticized each other in recent weeks, with Bitfarms railing against Riot’s unsolicited takeover attempt. As of writing, Riot shares are down 3.5% to $9.21 in Nasdaq stock market trading. Bitfarms stock dropped 10% in pre-market trading in Toronto.

Cryptopolitan Reporting by Jeffrey Gogo