Bitfarms Ltd. (Nasdaq/TSX: BITF), a global Bitcoin mining company, has issued a statement addressing recent actions by Riot Platforms, Inc. (Nasdaq: RIOT). According to Bitfarms, Riot Platforms has been attempting to disrupt its ongoing strategic alternatives review process.
Bitfarms’ Strategic Alternatives Review
The Board of Directors of Bitfarms formed a Special Committee of independent directors to consider multiple unsolicited proposals from third parties, including an offer from Riot Platforms dated April 22, 2024. After evaluating Riot’s proposal, the Special Committee concluded that it significantly undervalued Bitfarms and was not in the best interests of shareholders.
Riot Platforms’ Actions
Bitfarms has welcomed Riot’s interest and participation in the strategic review process, agreeing to the standstill term proposed by Riot. However, Riot declined to participate and instead has been acquiring Bitfarms’ common shares in the open market. Bitfarms alleges that these actions are intended to undermine the process and push Riot’s undervalued bid.
Bitfarms has asserted that Riot’s interests are not aligned with those of Bitfarms’ shareholders. Riot’s actions have been viewed as an attempt to disrupt the review process and advance its own agenda.
Shareholder Rights Plan
On June 10, 2024, Bitfarms adopted a Shareholder Rights Plan. This plan is designed to preserve the integrity of the strategic review process and does not preclude Riot or any other shareholder from making an unsolicited takeover bid or director nominations. Bitfarms emphasized that the plan aims to ensure the Special Committee can continue working towards maximizing shareholder value.
Corporate Governance
Bitfarms has accused Riot of hypocritically attacking its corporate governance while Riot itself has received poor governance ratings from Institutional Shareholder Services and Glass Lewis & Co. Bitfarms stated that Riot’s criticisms are a tactic to further its own interests at the expense of Bitfarms’ shareholders.
Bitfarms’ Commitment
Bitfarms remains committed to maximizing value for its shareholders. The Special Committee will continue to evaluate all opportunities thoroughly. Bitfarms has reiterated that it has taken appropriate steps to deliver the best possible outcome for its shareholders, in contrast to what it describes as Riot’s bad faith actions.
Advisors
Moelis & Company LLC is serving as financial advisor to Bitfarms, while Skadden, Arps, Slate, Meagher & Flom LLP, Peterson McVicar LLP, and McMillan LLP are acting as legal advisors.
About Bitfarms
Founded in 2017, Bitfarms is a global Bitcoin mining company that operates 12 mining facilities across Canada, the United States, Paraguay, and Argentina, with one more under development. The company is committed to using environmentally friendly energy sources, predominantly hydro-electric power.
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