Bitcoin miner Riot Platforms has withdrawn its initial offer to acquire its Canadian rival, Bitfarms. However, according to a release published Monday, June 24, Riot is now pushing for a reconstitution of Bitfarms’ board.
Riot has proposed a Special Meeting to allow Bitfarms shareholders to vote on the removal of Chairman and Interim CEO Nicolas Bonta and director Andrés Finkielsztain.
This move comes after a series of back-and-forth exchanges between the two companies, which began when Riot made an unsolicited buyout offer of around $950 million for Bitfarms in April.
Bitfarms’ board of directors had rejected the offer, claiming it undervalued the company and was not in the shareholders’ best interests. This rejection escalated into a tussle for control between the two crypto-mining companies.
Notably, Riot is Bitfarm’s biggest shareholder; it holds about 15% of the company stocks.
Bitfarms has faced financial challenges in recent years. According to its recent investor report, the firm suffered a gross loss of $22 million last year, compared to a gross profit of $11 million in 2022. The company also experienced an operating loss of about $72 million in 2023 and reported increased production costs per Bitcoin due to rising network difficulty.
In its latest release, Riot claimed that Bitfarm lacks solid corporate governance, and it is nominating three exceptional candidates to the proposed new board who are qualified to help restore shareholders’ confidence.
According to Riot, its nominees, John Delaney, an expert in government and public affairs, Amy Freedman, a former investment banker and Ralph Goehring, “will bring needed independence and corporate governance credentials to the Bitfarms Board, as well as relevant experience overseeing significant corporate transactions and serving in executive management and public company director roles.”
In a separate development, Riot Platforms recently saw its own stock price decrease following an announcement by Kerrisdale Capital that it was taking a short position on RIOT while simultaneously holding a long position on Bitcoin. Kerrisdale Capital also declared a “war” against all Bitcoin mining firms, calling the industry one of “snake oil salesmen.”
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