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 unbiased administrators following current removals whereas additionally criticizing a number of of the corporate’s current selections.
Criticism of Stronghold acquisition
Riot raised considerations about Bitfarms’ current acquisition of Stronghold, a deal valued at $175 million. In accordance with 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 trade participant was prepared to pay such a excessive value for Stronghold, which had been successfully “for sale” for a substantial interval.
Contemplating this, Riot said 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 concerned that any transaction the current Bitfarms Board will pursue will be punitively dilutive to all Bitfarms’ shareholders when there are other more attractive financing options available.”
Proposed board adjustments
Riot, holding almost 20% of Bitfarms, had initially demanded three seats on the smaller firm’s board. Nonetheless, as a consequence of current 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 switch two current administrators, co-founder Andres Finkielsztain and Fanny Philip. Riot emphasised that Finkielsztain, one among Bitfarms’ three co-founders, is partly chargeable 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 might carry helpful 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.
