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 mix of cash and Riot common stock — amounting to a $950 million offer.

Bitfarms’ Special Committee of Independent Directors reviewed the offer and concluded it undervalued the company’s growth prospects.

Controversy

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

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

The legal dispute has added uncertainty to the executive transition, but Bitfarms’ Chairman and Co-Founder, Nicolas Bonta, has stepped in as interim President and CEO until a permanent replacement is found.

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

Additional interest

Despite the leadership turmoil, Bitfarms said it has attracted additional unsolicited interest from other parties. Each interested party has executed 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 with Bitfarms’ current business plan, a strategic business combination, or a sale of the company. It added that the board remains committed to “maximizing value for all shareholders.”

Bitfarms emphasized that the CEO search is progressing, and it continues to focus on its expansion and fleet upgrade. 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 under development, spread across Canada, the United States, Paraguay, and Argentina.

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