KEY POINTS
- Bitfarms co-founder Andres Finkielsztain has left the board as part of the agreement
- Riot has agreed to withdraw its June requisition until Bitfarms' 2026 annual meeting 'with certain exceptions'
- Riot first offered an unsolicited bid of $950M to acquire Bitfarms, which the latter rejected over supposed undervaluation
Toronto-based Bitcoin miner Bitfarms reached a settlement with Riot Platforms over Colorado-based Riot's hostile bid to take over Bitfarms, its Canadian rival. According to the deal announced on Monday, Bitfarms co-founder Andres Finkielsztain has left the board.
The two firms have been going back-and-forth in recent months after Riot first kicked off an aggressive campaign toward taking over Bitfarms. It first offered an unsolicited bid of $950 million, which Bitfarms said was an undervaluation.
Bitfarms has been pushing back, and most recently sealed a $175 million deal to acquire Stronghold Digital Mining. The acquisition has strengthened its position to block Riot's attempts of taking over its industry rival.
Terms Include Co-founder's, Board Departure
Under the agreement released on Monday, Bitfarms co-founder Andres Finkielsztain has left the board. He was immediately replaced by corporate governance expert Amy Freedman, an independent director proposed by Riot.
The agreement also noted that Riot has agreed to withdraw its June 24, 2024 requisition, "and to accept customary standstill provisions through the Bitfarms 2026 Annual Meeting, with certain exceptions."
The rival Bitcoin miners are set to hold a virtual meeting on Nov. 6, but it may be pushed back not later than Nov. 20 due to the agreement to nominate an additional director.
"This agreement represents a significant step to advance shareholder value creation at our respective companies and we are pleased to have reached this constructive resolution with Bitfarms. As Bitfarms' largest shareholder, we look forward to supporting a reconstituted Bitfarms Board and continued engagement with management," said Jason Les, Riot CEO in a statement.
Bitfarms CEO had similar thoughts, saying the company was pleased to reach an agreement with Riot. On the other hand, he noted that Bitfarms is focused on executing its growth strategy and diversifying beyond its Bitcoin mining operations.
Is This the End? Not Really
As stated in the agreement, the parties have agreed to reach a "standstill" for now, but things could still change before Bitfarms' 2026 annual shareholders' meeting. Aside from Riot already farming 20% of Bitfarms shares in recent months, it is safe to conclude that the agreement is more in favor of the former since its proposed director is now onboard.
Has Riot Given Up?
It remains to be seen how Riot will move forward following the agreement. However, it appears the settlement agreement isn't the end of the takeover saga.
Just this month, Riot continued to push for what it said was the need for corporate governance changes within Bitfarms. It wrote in an open letter to other shareholders that Bitfarms has a "broken governance" and needed "truly independent directors" with the expertise and experience needed for the benefit of all shareholders.
Bitfarms responded, saying Riot just wants to acquire Bitfarms at a discounted price "for the benefit of Riot shareholders, not Bitfarms shareholders" and allegedly refused to engage constructively with the Canadian Bitcoin miner.
