Bitfarms Responds to Riot Platforms' Alleged Disruption of Strategic Review

Bitfarms Ltd. (Nasdaq/TSX: BITF), a global Bitcoin mining company, has issued a statement regarding the recent actions of Riot Platforms, Inc. (Nasdaq: RIOT). According to Bitfarms, Riot Platforms attempted to disrupt its ongoing strategic alternatives review process.

Review of Bitfarms Strategic Alternatives

The Bitfarms Board of Directors formed a special committee of independent directors to consider several unsolicited third-party proposals, 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.

Actions of anti-riot platforms

Bitfarms welcomed Riot's interest and participation in the strategic review process, accepting the status quo period proposed by Riot. However, Riot declined to participate and instead acquired Bitfarms common stock on the open market. Bitfarms claims that these actions are aimed at undermining the process and promoting Riot's undervalued offer.

Bitfarms claimed that Riot's interests do not align with those of Bitfarms shareholders. Riot's actions were seen 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 prevent Riot or any other shareholder from launching an unsolicited tender offer or appointing directors. Bitfarms emphasized that the plan aims to ensure that the special committee can continue to work to maximize shareholder value.

Corporate governance

Bitfarms accused Riot of hypocritically attacking its corporate governance, while Riot itself received poor governance ratings from Institutional Shareholder Services and Glass Lewis & Co. Bitfarms said criticism of Riot are a tactic to promote 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 carefully evaluate all opportunities. Bitfarms reiterated that it took appropriate steps to deliver the best possible outcome for its shareholders, contrary 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 serving as legal advisors.

About Bitfarms

Founded in 2017, Bitfarms is a global Bitcoin mining company that operates 12 mining facilities in Canada, the United States, Paraguay and Argentina, with another under development. The company is committed to using environmentally friendly energy sources, primarily hydroelectric power.

Image source: Shutterstock

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