Bitfarms Schedules Crucial Shareholder Meeting Amid Riot Platforms’ Attempted Takeover

Bitcoin mining firm Bitfarms has announced October 29, 2024, as the date for a special shareholders’ meeting to vote on reconstituting its board of directors. This move comes after Riot Platforms’ requisition for the meeting on June 24.

Shareholders on record as of September 26, 2024, are entitled to vote at this meeting. Bitfarms emphasized that shareholders are not required to take any action before the meeting.

Reviewing Riot Platforms’ Request

A special committee of independent directors—assisted by legal and financial advisers—decided on the meeting and record date unanimously. The choice coincides with a major change in Bitfarms’ executive team. Shareholders will cast votes on eliminating director Andrés Funtué and chairman Nicolas Bonta.

This development tracks Ben Gagnon’s July 8 appointment as CEO. Gagnon is not a target for removal in this next vote even though he does not now sit on the board.

Furthermore, taken into account by shareholders will be the departure of Fanny Philip, who lately occupied the board seat left open by co-founder Emiliano Grodzki, following annual meeting removal.

Three fresh candidates for the board have been nominated by Riot Platform: John Delaney, a government and public affairs specialist with more than 25 years of experience; Amy Freedman, a corporate governance and capital markets specialist with over 25 years of experience; and Ralph Goehring, a financial and energy expert with vast public company CFO experience.

Bitfarms said in their Friday statement that Riot Platforms could have resolved these problems during the May 31 annual general meeting. Bitfarms pointed out that Riot has not yet presented a fresh corporate plan.

Riot wants the record date set following a planned hearing before the Ontario Securities Commission on July 22 and 23, therefore negating Bitfarms’ shareholder rights scheme.

“Poison Pill” Strategy

Bitfarms started using a “poison pill” approach in June in order to stop a possible takeover. Under this strategy, should any entity amass more than 15% of Bitfarms’ shares before September 10, the business would issue fresh shares, therefore diminishing the entity’s ownership.

This criterion rises to 20% from September 10. This strategy was carried out to guard Bitfarms against aggressive acquisitions and to guarantee that its management and board could keep running free-will.

In April, Riot Platforms sought to buy Bitfarms for around $950 million. The offer fell short, though. Riot dropped its earlier offer to buy the company for $2.30 a share last month, although indicating its desire to interact with a reconstituted Bitfarms board about a possible acquisition.

Riot withdrew the offer citing the absence of significant participation of the present board. The deal fell through; hence Riot has been progressively buying Bitfarms’ shares, becoming its largest shareholder with about 60 million shares, or 14.9% of Bitfarms.

With a market capitalization of $2.7 billion, Riot Platforms much exceeds Bitfarms’ market capitalization of around $1 billion. This significant variance in market value draws attention to Riot’s financial resources’ scope and possible impact on Bitfarms.

Bitfarms’ Future and Shareholders’ Engagement

Bitfarms reaffirmed on Friday its dedication to constructive interaction with its shareholders and expressed hope Riot would interact favorably with the business. Bitfarms underlined the need of not using its limited funds to safeguard the interests of stakeholders against the activities of Riot.

The company wants to concentrate on its main business activities and expansion plans free from the financial weight and distraction of a protracted conflict with Riot Platforms.

Riot’s significant ownership and forceful actions to affect Bitfarms’ corporate governance will probably influence the decisions taken at this conference, therefore determining the company’s operational emphasis and direction for the foreseeable future.

Maintaining its freedom and achieving its long-term goals in the cutthroat bitcoin mining sector will depend critically on Bitfarms’s capacity to navigate this challenging environment.