Riot Platforms Expands Stake in Bitfarms to 14%

The mining firm Riot Platforms has increased its holdings in rival Bitfarms to 57.62 million shares (14%).

Over the course of a week, the company allocated $3.87 million to acquire 1.43 million securities. These actions reflect Riot’s ambitions to execute a hostile takeover of Bitfarms.

On May 29, it was revealed that the company had made an offer to acquire Bitfarms for $950 million, which included a 20% premium over the target firm’s average stock prices for the month.

At that time, Bitfarms’ board expressed a desire to continue discussions on a potential deal in a substantive manner, while adhering to traditional confidentiality measures. A special committee stated that the offer “significantly undervalues the company and its growth prospects.”

At this stage, Riot Platforms declined to participate in the process of reviewing strategic alternatives, opting instead to continue purchasing shares on the secondary market.

On June 10, Bitfarms’ board of directors adopted a shareholder rights plan through a “poison pill” strategy. This practice aims to make the company less attractive and/or dilute the buyer’s stake in the target firm.

According to the plan, if any organization accumulates more than a 15% stake in Bitfarms after June 20 and before September 10, the company will issue new shares, diluting the stake. After September 10, the threshold will be reduced to 20% if the takeover attempt meets certain criteria.

Riot intends to call a special meeting of Bitfarms shareholders, where it plans to nominate several independent members to the board of directors.

On June 13, the company’s management reiterated that Riot Platforms’ takeover offer “significantly undervalues Bitfarms and does not serve the interests of shareholders.”

On the same day, its shares rose by 15% following the announcement of plans to increase its hash rate to 35 EH/s and beyond by 2025, through the development of a site in Pennsylvania, USA.

“This facility offers access to competitive power supplies and provides an opportunity to optimize and effectively hedge energy costs,” the statement said.

As a result, Bitfarms’ capacity is set to increase to 648 MW by 2025. This is 170% more than the current level and 47% higher than the plan for the end of 2024.

In January, CoinShares experts identified Bitfarms as one of the few mining enterprises that will remain profitable after the halving, even with bitcoin prices around $40,000.

In June, presidential candidate Donald Trump held a meeting with representatives of the cryptocurrency mining industry and promised to protect this activity in the United States and worldwide.