Bitfarms, a Bitcoin mining company, recently made a strategic move to prevent a hostile takeover by appointing Fanny Philip as their new independent board member. Philip is the fifth member of the board and the fourth independent one, aiming to thwart Riot Platforms’ attempts at taking over Bitfarms.
The situation between Bitfarms and Riot Platforms became tense when Riot backed out of a deal to purchase all of Bitfarms’ common shares at $2.50 per share, totaling a $950 million acquisition. Riot cited difficulties in working with Bitfarms’ board and being restricted from owning more than 15% of the company due to a ‘shareholder rights plan.’ Currently, Riot holds a 14.9% stake in Bitfarms and expressed its frustration by withdrawing its proposal to acquire all common shares.
Riot had planned to introduce three independent board members, including John Delaney, Amy Freedman, and Ralph Goehring, to facilitate a smooth transition in case of a merger between Bitfarms and Riot. However, Bitfarms’ appointment of Philip seems to have disrupted Riot’s plans for a takeover. Philip, who is the president of the Canadian Blockchain Consortium’s Québec Chapter, brings expertise and neutrality to the board, potentially thwarting any hostile takeover attempts.
The conflict between Bitfarms and Riot is occurring amidst a flurry of activity in the Bitcoin mining sector, with companies constantly seeking mergers and acquisitions to expand their data centers and increase bitcoin mining capacity. Additionally, the rise of AI technology has created a demand for power, which mining firms like Bitfarms can provide. This trend has led to many mining companies partnering with AI firms to leverage their power resources, thereby boosting their revenues despite the halving of mining rewards from the Bitcoin network.
Overall, Bitfarms’ strategic measures to prevent a hostile takeover demonstrate the company’s commitment to safeguarding its interests and maintaining its independence in the face of external pressures. By appointing a new independent board member like Fanny Philip, Bitfarms is sending a clear message that it is prepared to defend itself against any hostile advances and continue its operations in the competitive Bitcoin mining industry.