Riot Platforms has significantly increased its investment in Bitfarms, acquiring 1 million common shares of the Canadian Bitcoin mining company. This move raises Riot’s ownership stake in Bitfarms to approximately 18.90%. The shares were purchased at a weighted average price of $2.28 each, amounting to a total investment of about $2.3 million, according to an August 13 press release from Riot.
Riot’s Persistent Acquisition Efforts
This acquisition is part of Riot’s ongoing efforts to strengthen its position in Bitfarms. Earlier this year, Riot made a $950 million offer to acquire Bitfarms, but the proposal was withdrawn after failing to gain the support of Bitfarms’ board. Riot’s increased stake now grants it greater influence over the company, which has led to a 3.26% rise in Bitfarms’ share price, according to Google Finance data.
Strategic Moves and Leadership Changes
Riot has also taken steps to influence Bitfarms’ governance, including calling for a special meeting to propose changes to the company’s board. Recent leadership changes at Bitfarms include the appointment of Ben Gagnon as CEO and Brian Howlett as independent chairman. Notably, Nicolas Bonta, a co-founder of Bitfarms and a key figure in the ongoing takeover battle with Riot, has recently stepped down from the board.
Bitfarms’ New Rights Plan to Counter Takeover Attempts
In response to the takeover bid and regulatory challenges, Bitfarms has introduced a new “rights plan” aimed at protecting its shareholders. This plan is designed to address potential takeover attempts by allowing existing shareholders to purchase additional shares at a discount if an acquirer accumulates 20% or more of the company’s shares through exempt transactions. The rights plan is effective for six months and aims to dilute the stake of any potential acquirer, ensuring fair treatment for all shareholders.
With these developments, both companies continue to navigate the complexities of the acquisition landscape while seeking to enhance their strategic positions in the Bitcoin mining industry.
