Mining firm Riot Platforms has acquired an additional 1 million shares of Bitfarms, raising its stake to 18.9% with the intention of a hostile takeover, as reported by The Block.
Currently, Riot Platforms holds over 85.29 million securities of its competitor, making it the largest shareholder.
On August 13, Bitfarms co-founder Nicolas Bonta resigned from the board of directors. His position was filled by the company’s CEO, Ben Gagnon.
In late May, Riot made an offer to acquire Bitfarms for $950 million. Bitfarms deemed the offer as “substantially undervaluing the firm and its growth prospects.”
The Bitfarms board expressed a desire to continue discussions on a potential deal “in a meaningful way,” while adhering to traditional confidentiality measures. A special committee stated that the offer “significantly undervalues the company and its growth prospects.”
Riot declined to participate in the process of exploring strategic alternatives, continuing to purchase securities on the secondary market.
In June, Bitfarms adopted a shareholder rights plan through a “poison pill” strategy. Riot nominated three independent directors to the board of the target company, increasing its stake to 14%.
In July, Bitfarms implemented a new “poison pill” protection plan. It includes a restriction on accumulating shares beyond a 20% stake. The company’s management noted that there are currently no specific takeover proposals that can be accepted under Canadian law. This implies that holders of 50% of common shares must consent to their purchase.
Back in July, Riot Platforms acquired bitcoin miner Block Mining for $92.5 million.