Bitfarms and Riot Platforms Reach Settlement Agreement, Ending Takeover Bid

Highlights:

• Bitfarms and Riot Platforms settle, with Riot withdrawing its acquisition bid and agreeing to standstill provisions until 2026.
• Amy Freedman joins Bitfarms board, replacing Andrés Finkielsztain, as part of the settlement between Bitfarms and Riot Platforms.
• Riot Platforms retains a 19.9% stake but cannot acquire over 20% of Bitfarms without board approval, per the agreement.

Bitfarms, a global leader in vertically integrated Bitcoin data center operations, and Riot Platforms, an industry leader in Bitcoin mining, have reached a settlement agreement, effectively ending a takeover attempt that began earlier this year. Riot Platforms, which had previously sought to acquire Bitfarms, has withdrawn its acquisition bid as part of the settlement. The companies issued a joint statement on September 23, 2024, detailing the terms of the agreement.

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

One of the key components of the settlement includes a significant reshuffling of Bitfarms’ board. Amy Freedman, an experienced corporate governance expert, has been appointed to the board, replacing Andrés Finkielsztain, who stepped down. Freedman brings over 25 years of experience in public capital markets and corporate governance. She will serve on several important committees, including the Governance and Nominating Committee.

Under the agreement’s terms, Riot Platforms is now subject to standstill provisions that limit its ability to acquire more than 20% of Bitfarms without board approval. Riot currently holds a 19.9% stake in the company, making it Bitfarms’ largest shareholder. The agreement also grants Riot certain rights to purchase additional shares, provided it maintains a 15% or higher ownership stake.

Board Changes and Shareholder Meeting

As part of the settlement, Bitfarms plans to expand its board from five to six members. Shareholders will vote on this change, as well as on the nomination of an independent director, during a special shareholder meeting. While this meeting was initially set for November 6, 2024, it may be delayed slightly due to the nomination process but will not take place later than November 20, 2024. Riot has agreed to vote in favor of these proposals, including Bitfarms’ shareholder rights plan, which was adopted in July 2024.

Bitfarms’ CEO, Ben Gagnon, expressed optimism about the settlement. He emphasized that it will allow the company to focus on growth strategies.

Gagnon said:

“We remain committed to diversifying our business into areas like energy generation, energy trading, and high-value revenue streams such as HPC/AI,”

Riot Platforms CEO Jason Les also praised the agreement, stating that it represents a step forward for shareholder value creation. Les emphasized Riot’s ongoing commitment to Bitfarms, signaling that Riot would continue to engage with Bitfarms’ management and monitor its investment closely.

Background of the Dispute

The settlement marks the end of a takeover saga that started in April 2024. During that time, Riot Platforms made an unsolicited $950 million offer to acquire Bitfarms. Bitfarms rejected the bid, adopting a shareholder rights plan, often referred to as a “poison pill,” to prevent Riot from gaining a controlling stake. Despite these efforts, Riot continued to increase its stock ownership, ultimately becoming Bitfarms’ largest shareholder.

Riot had also proposed nominating independent directors to Bitfarms’ board, leading to a prolonged standoff between the two companies. The current settlement, however, signals the end of these disputes and allows both firms to move forward with their respective strategies.

With the resolution of the takeover bid, both Bitfarms and Riot Platforms are positioned to focus on their growth objectives. Riot’s ownership stake, while substantial, remains capped under the terms of the agreement, ensuring that Bitfarms retains control over its strategic direction.