Bitfarms and Riot enter into settlement agreement in takeover saga

Bitfarms and Riot platforms today announced that they have reached a settlement agreement ahead of the Special Meeting of Bitfarms Shareholders, which was originally set for November 6, 2024, but will now take place virtually.

We are pleased to announce that #Bitfarms has entered into a definitive settlement agreement with @RiotPlatforms.

For more details, see the full release here: https://t.co/U5H6EMxgf7#Bitcoin #BitcoinMining #BITF pic.twitter.com/EJYfCxD2RA

— Bitfarms (@Bitfarms_io) September 23, 2024

According to an agreement released by both companies on Monday morning, Riot Platforms' attempt to seize Bitfarms, a global leader in vertically integrated Bitcoin data center operations and also a rival Bitcoin mining company, through a hostile takeover appears to have come to an end for the time being. 

Bitfarms and Riot joint settlement agreement terms 

According to the agreement's terms, as seen in the press release, 

• Amy Freedman has been appointed by Bitfarms to the Board, the Governance and Nominating Committee, and the Compensation Committee, effective immediately. 
• Andrés Finkielsztain has resigned as Bitfarms’ Board of Directors. 
• Riot has consented to rescind its amended June 24, 2024 request and, with some exceptions, to accept the customary standstill provisions through the Bitfarms 2026 Annual Meeting. 
• Shareholders will be asked to approve the board's plan to increase the number of board members from five to six, elect an independent director to fill the sixth position, and ratify the firm's July 24, 2024 shareholder rights plan at the special meeting. Riot has committed to voting in favor of these proposals. 
• With a few exceptions, the company has granted Riot the right to buy shares of the company as long as Riot owns 15% or more of the outstanding common shares. 

The Special Meeting may be postponed due to the agreement to propose an extra director for election at the meeting; however, it will not take place later than November 20, 2024. As soon as it can, the company will notify its shareholders of the special meeting's date, the post added. 

Statement from Brian Howlett, Independent Chairman of the Board 

The Bitfarms Board is dedicated to effectively supervising the company's strategic plan as we strive to position Bitfarms to take advantage of the opportunities that lie ahead, according to a statement from Brian Howlett, Independent Chairman of the Board. 

We also understand how important it is to have a diverse, skilled, and experienced board, and we welcome the addition of qualified individuals who can add their unique perspectives and insights. This agreement, which we feel is best for all Bitfarms shareholders, is something we are happy to have reached with Riot. Howlett further explained. 

Mr. Howlett said he would like to thank Andrés for his invaluable contributions to Bitfarms over the last four years. Andres was a great asset to the boardroom because of his deep understanding of the financial and cryptocurrency sectors. The company hopes he succeeds in all of his future pursuits. We anticipate using Amy's wealth of knowledge in advising public companies to our advantage as the Board collaborates to increase shareholder value. 

Ben Gagnon, CEO of Bitfarms, explained that the company is happy to have reached this agreement with Riot and is eager to focus entirely on carrying out their growth strategy.

Gagnon said beyond Bitcoin mining, the company's goal is to expand the company's revenue streams into other high-value industries like energy trading, energy generation, heat recycling, and artificial intelligence (HPC). These are all exciting and mutually beneficial ventures. 

Riot CEO Jason Les stated, "We are happy to have reached this positive resolution with Bitfarms and believe that this agreement represents a vital step to advance shareholder value creation at our respective firms." As the largest shareholder at Bitfarms', we're happy to continue working with management and supporting the reconstituted board at Bitfarms. 

Bitfarms' board rejected an offer for its acquisition by rival miner Riot Platforms

In April, Riot Platforms made an attempt to pay approximately $950 million to acquire Bitfarms. Riot had earlier announced that it was prepared to discuss a possible acquisition of Bitfarms with a reconstituted board in June, but it later withdrew its bid to buy the business for $2.30 per share due to the board's “lack of meaningful engagement.” 

Riot has been gradually accumulating stock in the company to become its largest shareholder since that deal was rejected. The company currently holds 90,110,912 common shares in Bitfarms, or roughly 19.9% of the company. 

In an effort to stave off a potential takeover, Bitfarms elevated its chief mining officer to chief executive officer while strategically evaluating its next course of action in the first week of July.

Disclaimer: This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.