Riot Platforms Increases Its Bitfarms Stake with $2.28 Million Shares Acquisition

Wall Street's third-largest Bitcoin mining firm, Riot Platforms, has increased its stake in Bitfarms Ltd to 18.9%. To boost its stake, Riot spent $2.28 million purchasing 1 million common shares of Bitfarms.

Moreover, Riot's recent acquisition represents about 0.22% of Bitfarms' issued and outstanding common stock. Also, the accumulation brings Riot's cumulative Bitfarms share ownership to 85.3 million.

Riot Boosts Ownership Stake in Bitfarms to 18.9%

Bitcoin mining company Riot Platforms announced that it bought more Bitfarms shares via an August 13 press release.

According to the details, Riot purchased an additional 1 million common shares of Bitfarms at an average cost of $2.28 per unit. This new acquisition raises Riot's total Bitfarms holdings to 85.3 million shares, giving it an 18.9% stake.

In addition, Riot noted that it followed the standard purchasing procedures for this latest acquisition on the Nasdaq Stock Market and other open-market trades.

Before now, Riot and Bitfarms have been at loggerheads over the former's move to acquire the latter completely. So, its latest move marks a continuous tension between the two mining firms.

On June 24, Riot requested a special meeting with Bitfarms' shareholders. According to its disclosure, Riot sought to remove some of Bitfarms' Board of Directors and replace them with some independent director candidates."

Moreover, Riot said it will seek other avenues to take over Bitfarms Ltd. by massively acquiring its stakes.

Further, Riot planned to increase its hashrate and expand its presence beyond Texas as part of a broader expansion strategy. This move engineered its acquisition of Block Mining, a Kentucky-based firm, for $92.5 million.

The finalized acquisition deal for Block Mining involved $18.5 million in cash and $74 million in Riot common stock. If it secures additional power purchase agreements, Block Mining will be entitled to a potential earn-out of about $32.5 million until 2025.

Bitfarms Ltd Pushes Back On Riot's Acquisition Moves

The Canadian crypto mining firm Bitfarms Ltd has remained resilient in pushing back Riot's acquisition moves.Bitfarms rejected Riot's acquisition offer of $950 million, tagging the move as undervaluation for the firm.

#Bitfarms Issues Statement re: Riot's Comments & Actions

Board is committed to maximizing shareholder value & continues to welcome Riot in strategic alternatives review
Shareholder Rights Plan preserves integrity of process
Riot's interests are not aligned with BITF...

- Bitfarms (@Bitfarms_io) June 13, 2024

Further, Bitfarms tried to introduce a poison pill' approach to push back any possible hostile takeover attempt from Riot. However, the Canadian regulators revolted against such measures.

Meanwhile, Bitfarms has passed through certain phases to strengthen its organizational structure. It underwent leadership changes, with the immediate appointment of Ben Gagnon as CEO and Brian Howlett as its board's independent chairman.

In addition, Bitfarms devised means to circumvent some regulatory challenges and rulings against its shareholder rights plans. The company laid out a new rights plan that will promote fair treatment to all shareholders in cases of undesirable takeover attempts.

The new plan introduces protective measures against creeping bids" from potential acquirers. This is a situation where an acquirer seeks to own 20% or more of the firm's stake through exempt purchases.

Also, the new plan permits existing shareholders to purchase more shares at a discount within six months. This action will secure shareholder interest by diluting the stake of potential acquirers.

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