Bitcoin mining giant Riot Platforms is set to acquire its competitor Bitfarms for $950 million, citing concerns that Bitfarms’ founders are not acting in the best interests of all shareholders.

Riot Platforms, an American company, aims to become the “largest publicly listed Bitcoin miner” globally. The firm has made an acquisition offer of $2.3 per share to Bitfarms’ shareholders, totaling the acquisition at $950 million. This offer includes both cash and common stock, with Bitfarms’ shareholders potentially owning up to approximately 17% of the combined company.

This cash and stock proposal would provide Bitfarms’ shareholders with a substantial premium and immediate cash value, as well as significant potential for future value creation through participation in a financially and commercially stronger company with a well-defined strategy, led by an established and proven management team.

The proposal was first delivered privately to the Bitfarms board in late April. However, Riot reports that the board rejected the offer without engaging in substantive dialogue. Additionally, new allegations have surfaced in a $27 million lawsuit filed by Bitfarms’ recently terminated CEO Geoffrey Morphy, raising concerns about whether certain directors are acting in the best interests of all shareholders.

We are deeply concerned that the founders on the Bitfarms Board — Nicolas Bonta and Emiliano Grodzki — may not be acting in the best interests of all Bitfarms shareholders.

Riot Platforms CEO Jason Les

Riot Platforms plans to arrange a special meeting with Bitfarms’ shareholders after May 31 to propose the addition of new, well-qualified, and independent directors to the Bitfarms Board. Following the acquisition offer, Riot purchased 10% of Bitfarms’ shares, causing BITF’s stock to rise by almost 10% to $2.21.

In mid-May, Geoffrey Morphy filed a lawsuit against Bitfarms in the Superior Court of Ontario, claiming breach of contract, wrongful dismissal, and seeking aggravated and punitive damages after the firm announced his departure earlier in March.

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