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Riot Nominates Three Independent Directors to Bitfarms Board Amid Takeover Effort

Hassan Shittu
Last updated: | 2 min read
Riot Nominates Three Independent Directors to Bitfarms Board Amid Takeover Effort

Riot Platforms officially requisitioned a special June 24 meeting of shareholders of Bitfarms, a leading crypto mining company specializing in Bitcoin (BTC). The initiative is intended to replace the current Bitfarms Board of Directors, which Riot alleges has failed in its corporate governance duties and maximizing shareholder value.

Shareholders will vote to remove and replace Chairman Nicolas Bonta and Director Andrés Finkielsztain and fill the vacancy left by co-founder Emiliano Grodzki.

Riot Calls for Change at Bitfarms, Requisitions Special Meeting to Remove Board Members

Riot cited several reasons necessitating boardroom change at Bitfarms, including the mishandling of CEO succession, inadequate responses to acquisition proposals, and implementing a shareholder rights plan without sufficient shareholder support.

“The current board’s resistance to engage constructively has impeded progress and underscores the urgent need for change,” the announcement read.

Riot, the largest shareholder of Bitfarms, with an approximately 14.9% stake, nominated three independent directors for election to the Bitfarms Board. These nominees—John Delaney, Amy Freedman, and Ralph Goehring—are touted as “highly qualified and possess extensive experience in corporate governance, public company oversight, and strategic transactions.”

Riot emphasized that each nominee was entirely independent of both Riot and Bitfarms, and would inject fresh perspectives into the boardroom.

“We believe new, independent voices are essential to ensuring Bitfarms’ board acts in the best interests of shareholders,” the announcement read.

Additionally, Riot has withdrawn its previous proposal to acquire Bitfarms for US$2.30 per share, citing the Bitfarms Board’s lack of meaningful engagement in negotiations.

The contentious relationship between Riot and Bitfarms escalated following Bitfarms’ implementation of a shareholder rights plan, colloquially known as a “poison pill,” with a trigger threshold set below standard governance norms. Riot has openly criticized this move, arguing it undermines shareholder rights and reflects a board unwilling to prioritize shareholder interests.

Bitfarms Faces Pressure as Shareholders Prepare for Special Meeting

Bitfarms, faced with mounting pressure from Riot and discontent among shareholders, has yet to respond formally to Riot’s requisition. The upcoming Special Meeting, anticipated within 21 days per regulatory requirements, will allow Bitfarms shareholders to vote on Riot’s proposed board changes.

Riot emphasized that the move comes after extensive efforts to constructively engage Bitfarms’ board on strategic matters, including a proposed merger between Riot and Bitfarms. According to Riot, the current board’s response—including implementing a shareholder rights plan—has hindered progress and highlighted the need for new leadership.

Despite Riot’s initiative, Bitfarms and Riot saw declines in share prices, dropping nearly 7% and 2%, respectively, following the announcement.