Riot Platforms, a leading Bitcoin mining company, has launched a dedicated website to inform shareholders about corporate governance issues at Bitfarms and Riot’s plans to reconstitute the board. This move is part of Riot’s decisive strategy to advance its acquisition of Bitfarms, marking a significant shift in their approach.
As Riot Platforms moves forward with its acquisition plans, this initiative represents a proactive step to address shareholder concerns and secure the necessary support for the board overhaul, ultimately facilitating a successful merger with Bitfarms.
Riot Platforms Launches Campaign to Reconstitute Bitfarms Board
Riot Launches https://t.co/FxRs2TcjIZ
Website Will Allow Shareholders to Learn More About Bitfarms’ Broken Corporate Governance, the Need for Urgent Board Change and Riot’s Three Highly Qualified, Independent Director Nominees.
Read the full press release here:…
— Riot Platforms, Inc. (@RiotPlatforms) July 8, 2024
Riot Platforms has launched a new website, [www.ABetterBitfarms.com], to gather support for its proposal to revamp Bitfarms’ board of directors. This initiative aims to educate shareholders about the perceived governance shortcomings at Bitfarms and Riot’s strategy to introduce new leadership.
In a recent press release, Riot encouraged Bitfarms shareholders, employees, and other stakeholders to visit the website for updates, to anonymously share their views, and to learn more about Riot’s efforts to introduce directors with fresh perspectives, strong corporate governance skills, and extensive experience in executive management and public company director roles.
The newly launched website aims to educate shareholders on the importance of corporate governance reforms and outlines Riot’s vision for a revamped Bitfarms board. The website serves as a platform for Riot to communicate directly with shareholders, providing transparency and clarity about the proposed changes and the benefits they are expected to bring.
Riot, which holds a 14.9% stake in Bitfarms, announced on June 24 its plan to replace three members of Bitfarms’ board with independent directors. This move came after Riot formally requested a special shareholder meeting, highlighting its concerns about Bitfarms’ corporate governance and efforts to maximize shareholder value.
Riot Platforms stated that their objective is to restructure the board to address these governance issues and initiate a constructive dialogue about a potential acquisition.
Shareholders are set to vote on the removal and replacement of Chairman Nicolas Bonta and Director Andrés Finkielsztain, as well as fill the vacancy left by co-founder Emiliano Grodzki.
In response to Riot’s actions, Bitfarms appointed Fanny Philip as an independent board member on June 28, amidst the ongoing conflict. Philip filled the vacancy created by Grodzki’s departure, following the most recent Annual General and Special Meeting of Shareholders.
Notably, this appointment followed the current board’s decision to block Riot’s attempt to increase its ownership stake beyond 15%.
Riot’s requisition for a board overhaul cited several key reasons, including mishandling CEO succession, inadequate responses to acquisition proposals, and the implementation of a shareholder rights plan without sufficient support.
Riot has proposed three independent directors: John Delaney, a former Jacksonville mayor; Amy Freedman, former CEO of Kingsdale Advisors; and Ralph Goehring, a former CFO in the energy sector. Riot believes these candidates will bring essential corporate governance expertise and new perspectives to Bitfarms.
Bitfarms Rejects Riot’s $950 Million Acquisition Offer and Adopts Shareholder Rights Plan
Riot, based in the United States, offered to acquire the Canada-based mining firm for $950 million in May, a proposal that was rejected. This price represented a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24.
In response to Riot’s acquisition attempt, Bitfarms adopted a shareholder rights plan on June 10, ten days after its Annual General and Special Meeting. The plan, also known as a “poison pill,” is designed to deter hostile takeovers by allowing existing shareholders to purchase additional shares at a significant discount if a single entity acquires a substantial portion of the company’s stock without board approval.
Specifically, if a person or group becomes a 15% holder of Bitfarms’ shares by September 20 and then increases their stake to 20% without board approval, other shareholders could buy common shares at a significant discount to the market price at that time.
Frustrated by what it describes as poor governance that blocks productive discussions, Riot is now pushing for changes in leadership to ensure a serious dialogue about the merger can take place.
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