Bitfarms founders potentially not acting in the best interest
Riot Platforms, a major player in Bitcoin mining, is making moves to acquire its competitor Bitfarms for a whopping $950 million. Riot Platforms believes that the founders of Bitfarms have not been acting in the best interests of all shareholders, prompting this acquisition offer.
With the goal of becoming the largest publicly listed Bitcoin miner worldwide, Riot Platforms has proposed to buy all shares of Bitfarms at a price of $2.3 per share. This would result in a total acquisition cost of $950 million. In a press release on May 28, the Colorado-based crypto mining company stated that it is offering cash and common stock as part of the deal. If the acquisition goes through, Bitfarms’ shareholders would own approximately 17% of the combined company.
The proposal was initially presented privately to the Bitfarms board in late April. However, Riot Platforms claims that the board rejected the offer without engaging in any meaningful discussions. To add fuel to the fire, Riot Platforms points to a $27 million lawsuit filed by Geoffrey Morphy, Bitfarms’ former CEO, which alleges that certain directors are not acting in the best interests of all shareholders.
In response, Riot Platforms plans to arrange a special meeting with Bitfarms’ shareholders after May 31. The purpose of the meeting is to introduce new, highly qualified, and independent directors to the Bitfarms Board. Additionally, after making the acquisition offer, Riot Platforms purchased 10% of Bitfarms’ shares. As a result, the stock price of BITF rose by nearly 10% to $2.21.
In mid-May, Geoffrey Morphy filed a lawsuit against Bitfarms in the Superior Court of Ontario. The lawsuit claims breach of contract, wrongful dismissal, and seeks aggravated and punitive damages. This legal action followed Bitfarms’ announcement of Morphy’s departure in March, which was described as “smooth.”
In other news, Bitfarms recently appointed a new CEO just days after selling a property worth $3.6 million.
