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Bitfarms has announced a settlement agreement with its rival and largest shareholder, Riot Platforms.
The two firms have been embroiled in a dispute since April following Riot’s unsolicited $950 million acquisition offer for the Canadian miner.
This resolution is expected to alleviate tensions and allow both companies to refocus on their growth strategies in the competitive Bitcoin mining industry.
Riot Withdraws Board Restructure Bid for Bitfarms as Part of Settlement Deal
In a major development in the ongoing corporate dispute, Riot Platforms has agreed to withdraw its proposal to restructure Bitfarms’ board as part of a settlement announced on September 23.
As part of the agreement, Bitfarms has appointed Amy Freedman to its board, a move seen as a way to stabilize governance amid the upheaval.
Freedman, a former investment banker with expertise in corporate governance, replaces Andrés Finkielsztain on the Bitfarms board.
She has also been assigned to key committees, including the Governance and Nominating Committee and the Compensation Committee, which has improved her influence within the organization.
Her appointment follows a push from Riot, which nominated three candidates during the dispute, demonstrating a strategic collaboration between the two companies despite their recent rivalry.
In addition to board changes, Bitfarms plans to elect an independent director as the sixth member of its board at an upcoming special shareholders meeting in November 2024. This comes after two co-founders of Bitfarms left the board following Riot’s aggressive takeover efforts.
As part of the settlement, Bitfarms has granted Riot rights to purchase shares, contingent on Riot maintaining a stake of 15% or more. However, Riot has agreed not to exceed 20% ownership without board approval, ensuring some level of control for Bitfarms.
Riot Platforms, Inc. Early Warning Report Press Release Regarding Settlement Agreement With Bitfarms Ltd.
For more information, please visit: https://t.co/T9NbFeYdBJ.
— Riot Platforms, Inc. (@RiotPlatforms) September 23, 2024
This settlement comes after several months of tension that began in April when Riot Platforms made an unsolicited offer to acquire the Canada-based Bitcoin mining firm Bitfarms for $950 million.
The situation escalated when Bitfarms rejected the takeover bid, prompting Riot to continue buying more shares in an attempt to gain control.
Riot bought 1.5M Bitfarms shares yesterday at a $2.45 avg. Riot owns 47.8M shares, or approx 12% of BITF. Riot is a legitimate activist but whether they can gain enough sway on the Bitfarms board is an open question. In the meantime, they are aggressively marking up their stake.
— Mike Alfred (@mikealfred) June 6, 2024
In response to this aggressive move, Bitfarms implemented a “poison pill” strategy designed to make it more difficult for Riot to take over the company without board approval. This was done by issuing new shares to existing shareholders, which would make any potential takeover more costly and complex.
Bitfarm and Riot’s settlement reflects a cautious but constructive resolution, paving the way for a more collaborative future between the two companies while still easing the daunting requirements of corporate governance and shareholder rights.
