Riot Platforms has acquired a 9.25% stake in Bitfarms after its takeover offer was rejected.

According to a press release Riot Platforms published on May 28, the Bitcoin mining firm’s $950 million offer to acquire all outstanding shares of Bitfarms was turned down by the Bitfarms board. Despite this, Riot proceeded to acquire a 9.25% stake in Bitfarms, making it the largest shareholder.

Riot Platforms Becomes Largest Shareholder

Riot proposed a buyout price of $2.30 per share, representing a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24. Additionally, it reflected a 20% premium over Bitfarms’ share price on April 19, the last trading day before Riot’s initial proposal.

The consideration offered to Bitfarms’ shareholders under the proposal included a combination of cash and Riot common stock, potentially giving Bitfarms’ shareholders ownership of up to 17% of the combined company.

“This cash and stock Proposal would provide Bitfarms’ shareholders with a substantial premium and immediate cash value,” the release reads. “As well as significant potential for future value creation through participation in a financially and commercially stronger company.”

The company stated that the privately delivered proposal was rejected without substantive dialogue. Additionally, the lawsuit brought by Bitfarms’ recently terminated CEO raised concerns about whether certain directors are acting in the best interests of all shareholders.

“As a result, Riot believes it is necessary to disclose its Proposal directly to Bitfarms’ shareholders,” the release reads.

Concerns Over Bitfarms’ Leadership

After Bitfarms’ Annual General and Special Meeting on May 31, 2024, Riot plans to requisition a Special Meeting of Bitfarms’ shareholders to introduce new independent directors to the Bitfarms Board.

“A combination of Bitfarms and Riot would create the premier and largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term growth,” stated Riot Executive Chairman Benjamin Yi.

Riot CEO Jason Les expressed concerns regarding the recent termination of the Bitfarms CEO Nicolas Bonta, suggesting that Nicolas Bonta and Emiliano Grodzki, both the founders of the company, may not be “acting in the best interests of all Bitfarms shareholders.”

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