Bitcoin mining company Bitfarms has set an extraordinary general meeting date for October 29, 2024, to vote on a board reorganization, following Riot Platform’s request for a meeting on June 24.
Bitfarms shareholders are eligible to vote at the meeting as of the record date of September 26, 2024, but the company said in a statement Friday that it is not obligated to take any action at this time. A special committee of independent directors of the board, with the assistance of financial and legal counsel, reviewed the request and unanimously decided on the meeting and record date, Bitfarms said.
As The Block reported last month, Bitfarms shareholders will vote at a special meeting to remove Chairman and Interim CEO Nicolas Bonta and Board Member Andres Finkelstein. Bitfarms appointed Ben Gagnon as its new CEO on July 8, but he is not currently on the board and therefore is not subject to dismissal. Shareholders will also vote at the annual meeting to remove Fanny Phillips, who recently filled the vacant seat on the board of directors after co-founder Emiliano Grotsky was removed.
Riot’s three candidates for board membership are John Delaney, a government and public administration veteran with experience in both the public and private sectors; Amy Freedman, a corporate governance and capital markets professional with over 25 years of experience; and Ralph Goehring, a finance and energy veteran with extensive experience as a CFO of publicly traded companies.
Riot’s takeover attempt
Bitfarms said in a statement Friday that Riot could have raised the issues in the request at the company’s annual general meeting on May 31 and has not yet proposed a new corporate strategy for the company. Riot asked for a record date only after a hearing scheduled for July 22 and July 23 with the Ontario Securities Commission in which it seeks to invalidate the company’s shareholder rights plan, Bitfarms said.
In June, Bitfarms adopted a “poison pill” approach to prevent a possible takeover. If a company accumulates more than 15% of Bitfarms’s stake by September 10, the company will issue new shares to dilute the company’s stake. However, after September 10, the threshold increases to 20%.
Riot Platforms attempted to acquire Bitfarms for about $950 million in April. Last month, Riot said it was ready to discuss a potential acquisition with the reconstituted Bitfarms board, but was withdrawing its previous offer to acquire the company for $2.30 per share “given the lack of meaningful participation from the current board.”
Since that deal fell through, Riot has steadily been buying up shares in the company, becoming its largest shareholder. As things stand, Riot currently owns about 60 million shares, or 14.9%, of Bitfarms.
Riot Platforms has a market cap of $2.7 billion, while Bitfarms has a market cap of around $1 billion.
Bitfarms added on Friday that it remains committed to constructive engagement with shareholders and that it “hopes that Riot will seek constructive engagement with the company so that Bitfarms does not have to expend its limited cash resources to protect the interests of stakeholders in response to Riot’s actions.”
The Block has reached out to Riot Platforms for comment and is awaiting a response as of publication time.
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