Bitcoin mining giant Riot Platforms continues to buy more Bitfarms shares after its offer to buy the company outright was rejected.
Toronto-based Bitfarms said Riot’s attempted takeover in April undervalued the company. At the time, the Colorado-based miner offered to buy Bitfarms’ remaining shares for $2.30 each.
Bitfarms’ stock price was $2.81 before the market opened on Friday.
Despite this, Riot continues to snap up Bitfarms shares, purchasing about 1.4 million more for nearly $3.9 million on Thursday. Overall, Riot now owns 14% of the company’s shares.
To know more: A deeper look at Riot’s “hostile” attempt to take over Bitfarms
Riot may look to increase or decrease its position in the competitor, the company noted in a press release on Friday. However, it is expected to convene an extraordinary meeting of shareholders to appoint “well qualified and independent” directors.
The company cites concerns about Bitfarm’s corporate governance. Bitfarms ousted Geoffrey Morphy as CEO after he filed a complaint against Bitfarms in the Ontario Superior Court.
Bitfarms, which is still looking for a new permanent CEO, said its committee – which is currently evaluating the company’s next steps – is made up exclusively of independent directors.
Earlier this week it put in place a shareholder rights plan to attach a “right” to each common share issued after June 20. These rights become exercisable if an owner holds at least 15% of Bitfarms’ outstanding shares between June 20 and September 10. .
To know more: Bitfarms plays defense while rival Riot still aims to seize power
Such a move essentially aims to limit the control of a shareholder, such as Riot, to acquire the company pending the strategic review.
However, the plan does not prevent Riot or other shareholders from making unsolicited takeover offers, Bitfarms said in a press release on Wednesday. Rather, it “preserves the integrity” of the review process as it decides the best path forward for the company.
“Riot’s comments make it clear that their frustration lies in no longer being able to tip the scales towards their opportunistic, non-binding offering, cloaked in vague corporate governance concerns,” Bitfarms added in a statement.
Riot Platforms, which operates primarily in Texas, has a distributed hash rate of 14.7 exahash per second.
At the end of May, Bitfarms had an operating hash rate of 7.5 EH/s. The company plans to bring this to 21 EH/s by the end of the year.
Riot’s acquisition of Bitfarm would be the first big deal among publicly traded miners since the Bitcoin halving, an event after which mining rewards per block fell from 6.25 BTC to 3.125 BTC.
Industry observers had predicted that the segment would see consolidation around the event, as some miners were expected to struggle in the new environment.
Architect Partners’ Elliot Chun told Blockworks at the time, however, that he didn’t expect large public miners to join forces around the halving unless they operate in different regions.
