The Chief Executive Officer of Riot Platforms, Jason Les, has criticized Bitfarms’ move to block share purchases. Bitfarms has said it is potentially a hostile takeover, while Riot has defended its move by saying that its poison pill plan falls outside the traditional business norms. The exchange of such communication began when Bitfarms announced its plan to dilute shares of stocks in a situation where a single investor buys more than 15% of the shares.
Riot has already raised its stake to 13.1%, as per the filing, by buying almost 6 million shares via the open market. The plan to increase the stake in the company was laid down last week. Riot also attempted to buy all the shares for $950 million in equity value, but the company turned down the offer.
Bitfarms is blocking Riot’s move to increase its share because such a large accumulation brings special privileges, including, but not limited to, voting members to the company’s board and installing or removing members of the c-suite. Bitfarms is unhappy delivering those special privileges to Riot Platforms. Hence, it has expressed commitment to blocking the move.
Les has criticized the company by saying that they could have engaged with them privately instead of implementing a poison pill, adding that it comes with a trigger that is below the customary 20% threshold.
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Les has further stated that they were committed to strengthening corporate governance issues at the company to ensure shareholders have a say in the company’s future. This pertains to the removal of Geoffrey Morphy from the position of Bitfarms CEO over the dispute over the governance of the company.
It was also his removal that ignited the turmoil for control over Bitfarms.
The development comes after Rio Platforms intends to acquire Bitfarms by buying its shares at $2.30 per piece. At that time, Riot was the largest shareholder of the company, with almost 9.25% in holdings. The proposal was valued at $925 million in equity but was later turned down by its competitor.
Riot is committed to presenting the proposal to shareholders directly in June. It comes with a demand to appoint qualified directors to the company’s administration. A special meeting is likely to be scheduled to arrange the appointment of new candidates.
Since the beginning, it has been stated that the collaboration will produce lucrative results and make the company one of the biggest Bitcoin miners. It remains to be seen how Riot members will respond to the proposal.
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Meanwhile, the company continues to block the move by expressing its plans to dilute the stock’s shares. It has not made any move in that direction, but that does not mean it will never make a move to dilute shares per its poison pill plan.
