Jason Liss, CEO of cryptocurrency mining company Riot Platforms, opposes Bitfarms’ plan to block the company from acquiring more than 15% of shares in a corporate buyout.
In a June 11 filing with the U.S. Securities and Exchange Commission, Riot disclosed that it purchased approximately six million shares of Bitfarms common stock in three separate transactions. The shares – worth more than $111 million at the time of purchase – and Riot’s previous acquisitions mean the company owns a 13.1% stake in Bitfarms.
Bitfarms announced a shareholder rights plan on June 10 that proposed a “poison pill” strategy as part of its defense against the Riot takeover. The plan will attempt to interfere with Riot’s acquisition of a 15% or greater stake in Bitfarms, thereby slowing down the company’s initial takeover plans by diluting the value of its shares.
In a statement dated June 12, Leigh claimed that Bitfarms’ plan “directly contravenes applicable legal and governance standards” by lowering the threshold to 15% instead of the “usual 20%.” According to Bitfarms, the shareholder plan still allows Riot to pursue its acquisition plans “in accordance with applicable Canadian securities laws.”
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American company Riot offered to acquire the Canadian mining company for $950 million in May. This price represents a 24% premium to Bitfarms’ one-month average share price as of May 24. Bitfarms’ stock price on Nasdaq has risen more than 56% in the past 30 days amid proposed acquisitions.
In May, Bitfarms announced that its former CEO, Jeffrey Murphy, would resign after filing a lawsuit against the mining company. Nicholas Bonta serves as interim president and CEO until the company decides on Murphy’s replacement. Lees called on the board to remove Bonta, saying he “bears direct responsibility for (Bitfarms’) poor corporate governance practices.”
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