In a recent development, Riot Platforms (RIOT) has publicly denounced Bitfarms’ adoption of a poison pill tactic aimed at thwarting its acquisition by the bitcoin miner, labeling it as “shareholder unfriendly.” This move by Riot underscores the pressing need for robust corporate governance standards within the industry.
Riot revealed on Wednesday that it had privately urged Bitfarms to oust its chairman and interim CEO, Nicolas Bonta, and appoint a minimum of two new independent directors to its board. The dispute originated from Riot’s unsolicited bid in April to acquire Bitfarms for approximately $950 million. Despite Bitfarms rejecting the offer, citing undervaluation, it implemented a poison pill strategy to fend off any hostile takeover attempts.
Under Bitfarms’ plan, any entity acquiring more than a 15% stake in the company between June 20 and Sept. 10 would trigger the issuance of additional shares to dilute the entity’s ownership. Riot condemned this threshold, asserting it conflicts with established legal and governance norms.
CEO Jason Les affirmed Riot’s commitment to addressing Bitfarms’ corporate governance issues and ensuring shareholder participation in shaping the company’s future trajectory. Bitfarms has yet to respond to requests for comment from Reuters.
In a separate disclosure, Riot disclosed a rise in its stake in Bitfarms from 12% to 13.1% earlier this month, solidifying its position as the largest shareholder, according to data from LSEG. Despite optimism surrounding the crypto industry, fueled by the approval of exchange-traded funds linked to bitcoin’s spot price, both Riot and Bitfarms have witnessed significant share price declines this year, with drops of 35% and 19%, respectively.
