Riot Platforms, a prominent Bitcoin mining company, is currently in the process of acquiring its competitor Bitfarms for a whopping $950 million. The company has accused the founders of Bitfarms of not prioritizing the best interests of all shareholders.
In a bid to solidify its position as the largest publicly listed Bitcoin miner worldwide, Riot Platforms, based in Colorado, has made an offer to purchase all shares of Bitfarms at $2.3 per share, amounting to a total of $950 million. The company revealed this information in a press release on May 28, stating that the proposed deal involves a combination of cash and common stock, with Bitfarms’ shareholders potentially owning around 17% of the merged entity.
The acquisition proposal was initially presented to the Bitfarms board privately towards the end of April. Riot claims that the board dismissed the offer without engaging in meaningful discussions with the company. Furthermore, Riot pointed out that recent allegations in a $27 million lawsuit filed by Bitfarms’ former CEO, Geoffrey Morphy, cast doubts on the commitment of certain directors to act in the shareholders’ best interests.
Following the rejection of their initial offer, Riot intends to convene a special meeting with Bitfarms’ shareholders post-May 31 to appoint new independent directors to the Bitfarms Board. Additionally, after the acquisition offer, Riot acquired 10% of Bitfarms’ shares, leading to a nearly 10% increase in BITF’s stock price to $2.21, as per data from Google Finance.
In a separate development, in mid-May, Geoffrey Morphy initiated legal action against Bitfarms in the Superior Court of Ontario, citing breach of contract, wrongful termination, and claims for aggravated and punitive damages following his unexpected departure from the company in March.
For more updates, Bitfarms recently welcomed a new CEO shortly after selling a property worth $3.6 million.