Riot-Bitfarms arguments end in settlement, board changes

Months after Riot’s so-called hostile takeover bid of Bitfarms, the two bitcoin miners forge an agreement

September 23, 2024 11:47 am

hlopex/Shutterstock modified by Blockworks

Bitcoin miners Bitfarms and Riot Platforms have agreed to settle governance disagreements ahead of a scheduled shareholder meeting.

As part of the agreement, revealed by the companies Monday, Andrés Finkielsztain has stepped down from Bitfarms’ board of directors. Amy Freedman, an adviser to Ewing Morris and Co. Investment Partners whom Riot previously nominated to serve, was added to the governing body.

Riot — the largest shareholder in Bitfarms — tried to acquire the company earlier this year, previously accusing Bitfarms leadership of “poor corporate governance practices and consistent inability to realize Bitfarms’ full potential.”

Given its growing stake in Bitfarms, which totaled 19.9% as of Sept. 3, Riot called a shareholder meeting to vote on proposed board members it nominated. Originally set for Oct. 29, the meeting date was pushed back a week.

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Bitfarms later named CEO Ben Gagnon to the board, as company co-founder Nicolas Bonta stepped down — a move Riot called “reactive and insufficient.” Riot also criticized Bitfarms’ acquisition of Stronghold Digital Mining.

At the shareholder meeting planned for Nov. 6, shareholders will be asked to allow the board to be expanded from five members to six as a way to add an independent director, the companies said Monday. They will also be able to ratify a shareholder rights plan floated in July.

Riot will vote in favor of these measures, per the latest agreement.

Gagnon said in a statement the agreement with Riot allows the company to get its focus back to its growth strategy.

“We remain focused on diversifying the business beyond bitcoin mining into exciting and synergistic new areas like energy generation, energy trading, heat recycling and other high value revenue streams like HPC/AI,” he added.

Riot CEO Jason Les called the deal “a significant step to advance shareholder value creation at our respective companies.”

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