Bitfarms and Riot Platforms reach settlement agreement in takeover saga

Riot Platforms’ attempted hostile takeover of Bitcoin mining rival Bitfarms appears to have come to an end for now, according to a joint settlement agreement announced by the two firms on Monday morning.

Under the terms of the agreement, Bitfarms co-founder Andres Finkielsztain has stepped down from the board, with Riot’s proposed independent director Amy Freedman, a corporate governance and capital markets expert with over 25 years of experience, taking his place, effective immediately.

Riot agreed to withdraw its amended requisition and to accept customary standstill provisions until Bitfarms’ 2026 annual meeting, with certain exceptions.

The settlement comes ahead of a special meeting of Bitfarms shareholders that was scheduled for Nov. 6. A special meeting will still be held virtually. However, it may be delayed as a result of an agreement to nominate an additional fifth independent director and vote on Bitfarms’ shareholder rights plan, which Riot has agreed to vote in favor of. The companies said it would not be held any later than Nov. 20.

“We are pleased to reach this agreement with Riot and look forward to turning our full attention to executing our growth strategy, Bitfarms CEO Ben Gagnon said. “We remain focused on diversifying the business beyond Bitcoin mining into exciting and synergistic new areas like energy generation, energy trading, heat recycling and other high-value revenue streams like HPC/AI.”

“This agreement represents a significant step to advance shareholder value creation at our respective companies and we are pleased to have reached this constructive resolution with Bitfarms,” Riot CEO Jason Les added. “As Bitfarms’ largest shareholder, we look forward to supporting a reconstituted Bitfarms Board and continued engagement with management.”

Riot Platforms attempted to acquire Bitfarms in April for roughly $950 million. In June, Riot said it was ready to engage with a reconstituted Bitfarms board about a potential acquisition but withdrew its previous offer to acquire the company for $2.30 per share given the 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 90,110,912 common shares in Bitfarms, about 19.9%, the bitcoin miner confirmed on Monday.

Following the settlement agreement, Bitfarms provided Riot with certain rights to purchase additional shares in the company provided Riot holds 15% or more of Bitfarms’ outstanding common shares.  However, under the standstill provisions, Riot remains prohibited from acquiring more than 20% of Bitfarms without prior approval of the board unless it intends to make another formal takeover attempt.

Riot said on Monday it intends to periodically review its investment in Bitfarms and may increase or decrease its position in the company.