Riot Platforms has intensified its efforts to accumulate rival Bitcoin miner Bitfarms by issuing an open letter to the agency’s shareholders on Sept. 3.
Within the letter, Riot introduced that it had lowered its request for board seats at Bitfarms to 2 impartial administrators following latest removals whereas additionally criticizing a number of of the corporate’s latest choices.
Criticism of Stronghold acquisition
Riot raised issues about Bitfarms’ latest acquisition of Stronghold, a deal valued at $175 million. In line with the agency, this transaction represented a premium of over 100% in comparison with Stronghold’s closing share worth the day earlier than the announcement.
Riot identified that no different trade participant was keen to pay such a excessive worth for Stronghold, which had been successfully “on the market” for a substantial interval.
Contemplating this, Riot acknowledged that the deal was not in one of the best pursuits of Bitfarms shareholders and urged the smaller miner to not enter into any financing transaction earlier than the completion of the October particular assembly. It added:
“Riot is deeply involved that any transaction the present Bitfarms Board will pursue will probably be punitively dilutive to all Bitfarms’ shareholders when there are different extra engaging financing choices accessible.”
Proposed board modifications
Riot, holding practically 20% of Bitfarms, had initially demanded three seats on the smaller firm’s board. Nevertheless, resulting from latest progress in addressing Bitfarms’ founder-led board tradition, Riot decreased its request to 2 seats.
Riot has proposed Amy Freedman and John Delaney as candidates to exchange two present administrators, co-founder Andres Finkielsztain and Fanny Philip. Riot emphasised that Finkielsztain, certainly one of Bitfarms’ three co-founders, is partly liable for its notion of the corporate’s troubled CEO succession course of, which has seen 5 CEOs in 5 years.
Riot assured that its nominees are fully impartial of each firms. It acknowledged they’d deliver useful public firm board expertise, company governance oversight, and transaction experience to the Bitfarms Board.
Final month, Bitfarms co-founder and chairman Nicolas Bonta stepped down amid broader management modifications. This adopted the sooner departure of one other co-founder, Emiliano Grodzki, who was voted off the board at Bitfarms’ most up-to-date annual assembly.
