Bitfarms Rejects Riot’s Unsolicited Acquisition Offer

By: Isha Das

Bitfarms announced on May 29 that it has rejected Riot Platform's unsolicited acquisition proposal, stating the offer significantly undervalued the company's growth potential. The proposal, presented on April 22, proposed $2.30 per common share in a combination of cash and Riot common stock, amounting to a total of $950 million. Following a review by Bitfarms' Special Committee of Independent Directors, it was concluded that the offer did not adequately reflect the company’s future growth prospects.

Controversy

The proposal arrived at a turbulent time for Bitfarms, which is currently in the midst of a CFO search due to the unexpected departure of former CEO Geoffrey Morphy on May 13. Morphy, who started with the company in 2020 and was promoted to CEO in 2022, has since filed a lawsuit against Bitfarms, alleging $27 million in damages for breach of contract and wrongful termination.

This legal dispute has introduced added complexity to the leadership transition. In the interim, Nicolas Bonta, Chairman and Co-Founder of Bitfarms, has taken on the role of interim President and CEO. Riot Platforms cited concerns over the board's ability to act in the best interest of shareholders, due to these ongoing internal issues, as a motivating factor for their unsolicited offer.

Additional Interest

Despite the leadership turmoil, Bitfarms reported receiving additional unsolicited interest from other parties. To ensure the highest value for its shareholders, the Special Committee has entered into Non-Disclosure Agreements with each interested party and is thoroughly examining strategic alternatives. These options include continuing Bitfarms’ current business strategy, pursuing a strategic business combination, or potentially selling the company.

Bitfarms stressed that its CEO search is progressing and that the company remains focused on its expansion plans and fleet upgrades. The company's goals include achieving a hashrate of 21 EH/s and an efficiency of 21 w/TH by 2024, which represents significant improvements in both growth and efficiency relative to industry peers.

Bitfarms currently operates 12 Bitcoin mining facilities across Canada, the United States, Paraguay, and Argentina, with another facility in development. The board reiterated its commitment to enhancing shareholder value.