Merger and acquisition frenzy in the mining industry! Riot hits back at Bitfarms, continues to increase stake to 14%: No communication between the two parties

The Bitcoin mining company Riot Platforms revealed in a statement yesterday that it has increased its holdings in Bitfarms Ltd by 1.43 million shares, representing approximately 14% of the latter's equity, nearing the 15% trigger threshold for Bitfarms' anti-takeover measures. A few days ago, Riot also criticized Bitfarms for not engaging with them, indicating serious governance issues within Bitfarms.

Bitfarms Rejects Riot's Acquisition Proposal, Implements Poison Pill Plan Against Takeover: Company Value Severely Undervalued

Riot Continues to Increase Bitfarms Stake to 14%

As part of its latest move to acquire Bitfarms, Riot Platforms has once again increased its stake in Bitfarms to 14%, nearing the threshold triggering the company's defensive measures:

Riot announced the acquisition of 1.43 million shares of Bitfarms at approximately $2.70 per share, totaling around $3.87 million, bringing its total holdings to 57.62 million shares, representing about 14% ownership of the company.

Last month, Riot attempted a hostile takeover of Bitfarms for approximately $950 million but was rejected, leading to significant purchases of the company's remaining shares.

In response, Bitfarms implemented a "Poison Pill" shareholder rights plan a few days ago to prevent Riot's potentially hostile acquisition intentions, aiming to raise the cost of acquisition.

Under the plan, if any entity holds more than 15% of Bitfarms by September 10, the company will issue new shares to dilute the acquirer's stake value; after September 10, the trigger threshold will be conditionally relaxed to 20%.

Riot Criticizes Bitfarms for Disregarding Shareholder Views

In a statement released on Wednesday via Businesswire, Riot responded to Bitfarms' shareholder rights plan, claiming it was unreasonable:

We attempted to contact Bitfarms' board privately through letters and calls, urging them to engage in constructive cooperation with us and appoint at least 2 directors who are completely independent of Bitfarms and Riot.

Additionally, "Bitfarms did not communicate with us and instead responded by implementing a poison pill plan with a trigger threshold far below the normal 20% threshold," they added.

Riot Platforms CEO Jason Les expressed regret over this, stating that it further demonstrates Bitfarms' board's stubbornness and disregard for shareholder recommendations:

We will continue to address Bitfarms' serious governance issues to ensure shareholders have a say in the company's future development.

Furthermore, Riot emphasized that acquiring Bitfarms shares through the Nasdaq stock market and other public markets is legitimate.

Currently, Riot Platforms has a market capitalization of around $3.17 billion, while Bitfarms is valued at approximately $1.05 billion.