Summary:
Riot Platforms increases its stake in Bitfarms to 19%.
Riot calls for a special shareholder meeting on October 29.
Bitfarms attempts a ‘poison pill’ strategy to defend against the takeover.
This is the first high-profile hostile takeover attempt in the Bitcoin mining industry.
Bitfarms continues to report strong performance and operational efficiency.
Riot Platforms' Hostile Takeover Bid
The third largest Bitcoin mining firm on Wall Street, Riot Platforms (RIOT), is intensifying its efforts to acquire Bitfarms (BITF), a smaller Canadian competitor. Recently, Riot increased its stake in Bitfarms to 19%, gaining control over 1 million additional BITF shares. This move comes alongside the departure of Bitfarms' co-founder and chair, Nicolas Bonta, who Riot has targeted for replacement since June.
Shareholder Meeting and Board Changes
Riot has called for a special shareholder meeting scheduled for October 29 to vote on the removal of Bonta and two other board members, proposing to replace them with “independent, highly qualified” individuals selected by Riot. Riot has accused Bitfarms' leadership of poor corporate governance after the company rejected its $950 million acquisition offer back in April.
The Poison Pill Defense
To defend against Riot’s takeover, Bitfarms attempted a ‘poison pill’ strategy, which would dilute shares of any aggressor acquiring a significant stake. Riot contested this move, and the Ontario Capital Markets Tribunal ruled against Bitfarms, effectively terminating the poison pill defense.
Industry Implications
This takeover attempt represents a significant moment in the Bitcoin mining industry, as noted by Nishant Sharma, Founder of BlocksBridge Consulting. He highlighted that this is the first high-profile hostile takeover attempt in the sector, reflecting the growing competition and consolidation among mining firms as they strive for a larger share of diminishing Bitcoin mining rewards.
Bitfarms' Resilience and Future Plans
Despite the takeover attempts, Bitfarms has demonstrated strong performance with efficient mining operations and holds the fifth-largest hashrate capacity among public miners at 10.5 EH/s. If merged with Riot’s 22 EH/s, they would surpass Marathon, becoming the largest publicly traded mining firm worldwide. However, Bitfarms remains committed to remaining independent, focusing on value creation and expansion beyond Bitcoin mining.
Bitfarms spokesperson stated, “Riot has repeatedly demonstrated misalignment with the best interests of Bitfarms’ shareholders.”
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