Bitfarms founders may not be acting in ‘best interests’ of shareholders

Bitcoin mining giant Riot Platforms is on track to acquire rival Bitfarms for $950 million, accusing Bitfarms founders of not acting in the best interests of all shareholders.

In an attempt to become the “largest publicly traded Bitcoin miner” worldwide, American company Riot Platforms has made an offer to acquire all BITF shares in Bitfarms for $2.3 per share, totaling $950 million.

Bitfarms shareholders were offered cash and common stock in a deal that would see Bitfarms shareholders own “approximately 17% of the combined company,” the Colorado-based crypto mining company said in a May 28 press release.

“This cash and stock offering provides Bitfarms shareholders with a significant premium and immediate cash value, as well as future value creation through participation in a financially and commercially stronger company with a well-defined strategy, led by established and corporate management.” Proven management team that will provide significant potential.

Riot Platforms

Riot said the offer was first privately conveyed to Bitfarms’ board of directors in late April, adding that the board rejected the offer “without engaging in a comprehensive dialogue with Riot.” The firm also said the new allegations in the $27 million lawsuit filed by Bitfarms’ recently ousted CEO Geoffrey Morphy “raise serious questions about whether certain executives are committed to acting in the best interest of all shareholders.”

“We are deeply concerned that the Bitfarms Board of Directors has not acted in the best interest of all Bitfarms shareholders by founders Nicolas Bonta and Emiliano Grodzki.”

Riot Platforms CEO Jason Les

Now Riot plans to add new, qualified, “independent directors” to the Bitfarms Board of Directors by holding a special meeting with Bitfarms shareholders after May 31. After making the acquisition offer, Riot bought 10% of Bitfarms shares, and BITF’s shares rose almost 10% to $2.21, according to Google Finance data.

In mid-May, Geoffrey Morphy filed a lawsuit against Bitfarms in the Ontario Superior Court, seeking breach of contract, wrongful discharge and aggravated and punitive damages after the firm announced his departure “without issue” in early March.