QUICK TAKE

• Bitfarms has set Oct. 29 as the date for a special meeting of its shareholders in response to a requisition for a shareholders’ meeting submitted by Riot Platforms.
• Bitfarms’ shareholders will vote on reconstituting Bitfarms’ board of directors, the latest step in Riot’s attempted takeover of its bitcoin mining rival. 

Bitcoin miner Bitfarms has set Oct. 29, 2024, as the date for a special meeting of its shareholders to vote on reconstituting its board of directors following Riot Platforms’ requisition for the meeting on June 24.

Bitfarms shareholders as of the record date of Sept. 26, 2024, are entitled to vote at the meeting, the firm said in a statement on Friday, but are not required to take any action at this time. A special committee of independent directors of the board reviewed the requisition with the assistance of financial and legal advisors and unanimously decided on the meeting and record date, Bitfarms said.

As previously reported by The Block last month, Bitfarms shareholders are set to vote on removing Nicolas Bonta, the chairman and interim CEO, and director Andrés Finkielsztain at the special meeting. Bitfarms appointed Ben Gagnon as its new CEO on July 8, though he does not currently serve on the board, so he is not a target for removal. They will also vote on the removal of Fanny Philip, who recently filled the vacancy left by co-founder Emiliano Grodzki after he was removed from the board at the shareholders’ annual meeting.

The three candidates Riot is putting up for the board are John Delaney, an expert in government and public affairs with both public and private sector experience; Amy Freedman, a corporate governance and capital markets expert with over 25 years of experience; and Ralph Goehring, a financial and energy expert with extensive public company CFO experience.

Riot’s takeover attempt

Bitfarms also argued in Friday’s statement that Riot could have raised the issues in the requisition at the company’s annual general meeting on May 31 and has yet to propose a new corporate strategy for the company. Riot requested the record date not be set until after a scheduled hearing before the Ontario Securities Commission on July 22 and July 23, at which it is seeking to nullify the company’s shareholder rights plan, Bitfarms said.  

In June, Bitfarms adopted a “poison pill” approach to prevent a possible takeover. Up to Sept. 10, if an entity accumulates more than 15% of Bitfarms’ stake, the company would issue fresh shares, diluting the entity’s stake. However, after Sept. 10, the threshold increases to 20%.

Riot Platforms attempted to acquire Bitfarms in April for roughly $950 million. Last month, Riot said it was ready to engage with a reconstituted Bitfarms board about a potential acquisition but was withdrawing its previous offer to acquire the company for $2.30 per share “given the current board’s lack of meaningful engagement.”

Since that deal was thwarted, Riot has steadily been buying up stock in the firm to become its largest shareholder. As things stand, Riot owns about 60 million shares, or 14.9%, of Bitfarms.

Riot Platforms has a market cap of $2.7 billion compared to Bitfarms’ cap of about $1 billion.

Bitfarms added on Friday that it remains committed to constructive engagement with its shareholders and is “hopeful that Riot will seek to constructively engage with the company so that Bitfarms need not expend its limited cash resources to protect the interests of its stakeholders against the actions of Riot.”

The Block reached out to Riot Platforms for comment and was awaiting a response as of publication time.