Bitfarms rejects Riot’s unsolicited acquisition offer

Bitfarms said on May 29 that it rejected Riot Platform’s unsolicited acquisition proposal because the offer undervalued the company.

The proposal, received on April 22, offered $2.30 per common share in a combination of cash and Riot common stock, which amounted to a $950 million offer.

Bitfarms’ special committee of independent directors reviewed the offer and concluded that it undervalued the company’s growth prospects.

Controversial

The proposal comes at a complex time for Bitfarms, which is conducting a CEO search following the abrupt firing of its former CEO, Geoffrey Morphy, on May 13.

Morphy, who joined Bitfarms in 2020 and became CEO in 2022, filed a lawsuit against the company, seeking $27 million in damages for breach of contract and wrongful termination.

The legal dispute added uncertainty to the executive transition, but Bitfarms Chairman and co-founder Nicolas Bonta took over as interim CEO until a permanent replacement is found.

Riot Platforms said its unsolicited offer was motivated by concerns that the board was not acting in the best interests of shareholders due to allegations made in the former CEO’s lawsuit.

Additional interest

Despite the turmoil within management, Bitfarms said it had received additional unsolicited interest from other parties. Each interested party has signed a customary non-disclosure agreement, and the special committee is conducting a comprehensive review of strategic alternatives to ensure maximum shareholder value.

According to the company, these alternatives could include continuing Bitfarms’ current business plan, a strategic business combination, or a sale of the company. He added that the board remains committed to “maximizing value for all shareholders.”

Bitfarms highlighted that the CEO search is progressing and continues to focus on its expansion and fleet upgrades. The company aims to achieve a hashrate of 21 EH/s and efficiency of 21 w/TH in 2024, representing a significant increase in both growth and efficiency compared to its peers.

Bitfarms has 12 Bitcoin mining facilities in operation and one in development, spread across Canada, the United States, Paraguay and Argentina.

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