Riot Platforms has intensified its efforts to amass 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 unbiased administrators following current removals whereas additionally criticizing a number of of the corporate’s current choices.
Criticism of Stronghold acquisition
Riot raised issues about Bitfarms’ current acquisition of Stronghold, a deal valued at $175 million. Based on the agency, this transaction represented a premium of over 100% in comparison with Stronghold’s closing share value the day earlier than the announcement.
Riot identified that no different business participant was keen to pay such a excessive value for Stronghold, which had been successfully “on the market” for a substantial interval.
Contemplating this, Riot said that the deal was not in the most effective 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 might be punitively dilutive to all Bitfarms’ shareholders when there are different extra enticing financing choices obtainable.”
Proposed board adjustments
Riot, holding almost 20% of Bitfarms, had initially demanded three seats on the smaller firm’s board. Nonetheless, as a result of current progress in addressing Bitfarms’ founder-led board tradition, Riot diminished its request to 2 seats.
Riot has proposed Amy Freedman and John Delaney as candidates to interchange two current administrators, co-founder Andres Finkielsztain and Fanny Philip. Riot emphasised that Finkielsztain, certainly one of Bitfarms’ three co-founders, is partly accountable 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 completely unbiased of each corporations. It said they’d convey 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 adjustments. 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.
