Bitfarms has appointed a new independent board member, Fanny Philip. He is the fifth board member and the fourth independent one. Philip’s appointment comes in time to prevent Riot Platforms from staging a hostile takeover of Bitfarms.
Both Bitcoin miners find themselves in a precarious position. Riot backed out of buying all of Bitfarms’ common shares at $2.50 per share. The deal amounted to a $950 million acquisition but was called off. Riot did so, claiming Bitfarms’ board was too hard to work with and prevented it from acquiring more than 15% of the company through a ‘shareholder rights plan.’ Riot holds a 14.9% stake in Bitfarms, blockaded from owning more. It mentioned regarding the incident, “engaging with the incumbent Bitfarms Board on a potential combination is just not possible.”
It added, “Riot has informed the Bitfarms Board that it has formally withdrawn its previous proposal to acquire all Bitfarms common shares for US$2.30 per share and stands ready to engage and negotiate with a reconstituted Bitfarms Board to pursue a mutually beneficial combination of Bitfarms and Riot.”
Riot planned on introducing three independent board members sufficiently distant from both parties. John Delaney, Amy Freedman, and Ralph Goehring were supposed to be those members, helping Bitfarms and Riot navigate through the takeover amicably. They were also expected to replace three other existing board members.
However, Bitfarms’ addition of Philip may seek to neutralize any efforts Riot launches at a hostile takeover. He is the president and a member of the Canadian Blockchain Consortium’s Québec Chapter. Riot’s efforts to bring Delaney, Freedman, and Goehring into the Bitfarms board have not paid off yet.
The battle between Bitfarms and Riot comes when Bitcoin mining firms make news daily. The sector is currently witnessing constant mergers and acquisitions as top miners look to consolidate data centers to mine more bitcoin. Moreover, the boom in AI technology requires power for its computations, which miners possess. Many miners are signing deals with AI firms to provide large amounts of power, increasing revenues as mining rewards from the Bitcoin network have halved.
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