Bitfarms rejects Riot’s unwanted takeover offer

On May 29, Bitfarms said it rejected an unsolicited takeover proposal for Riot Platform because the offer undervalued the company.

The proposal received on April 22 offered $2.30 per common share in the form of cash and shares of Riot common stock, representing an offer valued at $950 million.

Bitfarms’ Special Committee of Independent Directors reviewed the offer and concluded that it underestimated the company’s growth prospects.

Dispute

The proposal comes at a difficult time for Bitfarms, which is conducting a CEO search following the sudden firing of its former CEO, Geoffrey Morphy, on May 13.

Morphy, who joined Bitfarms in 2020 and became CEO in 2022, filed a lawsuit against the company seeking $27 million in damages for breach of contract and wrongful termination.

The legal dispute added uncertainty to the executive transition, but Bitfarms president and co-founder Nicolas Bonta has stepped in as interim president and CEO until a permanent replacement is found.

Riot Platforms said its unsolicited offer was based on concerns that the board was not acting in the best interests of shareholders following allegations in the former CEO’s lawsuit.

Additional interest

Despite the leadership turmoil, Bitfarms said it has attracted additional, unsolicited interest from other parties. Each interested party has entered into a customary Non-Disclosure Agreement and the Special Committee is conducting a comprehensive review of strategic alternatives to ensure maximum shareholder value.

According to the company, these alternatives could include a continuation of Bitfarms’ current business plan, a strategic business combination or a sale of the company. He added that the board remains committed to “maximizing value for all shareholders.”

Bitfarms emphasized that the search for a CEO is progressing and remains focused on fleet expansion and modernization. The company aims to achieve a hash rate of 21 EH/s and a performance of 21 w/TH in 2024, representing a significant increase in both growth and performance compared to competitors.

Bitfarms has 12 operational Bitcoin mining facilities and one in development, spread across Canada, the United States, Paraguay and Argentina.

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