Riot increases stake in Bitfarms with $2.2m share purchase

Riot continues its acquisition efforts, recently purchasing $2.2 million worth of Bitfarms stock.

Riot Platforms announced that it has purchased 1 million common shares of rival Bitfarms, increasing its stake in the Canadian Bitcoin mining firm to approximately 18.90%. The shares were purchased at a weighted average price of $2.28 each, bringing the total to approximately $2.3 million, Riot said in a press release on August 13.

The acquisition comes as Riot continues its efforts to take over Bitfarms, following a $950 million bid that was withdrawn earlier this year after it failed to gain a foothold on Bitfarms’ board. Riot’s recent stock purchase adds to its influence, with the company now holding about 19% of Bitfarms’ total shares. Following the news, Bitfarms shares rose 3.26%, according to Google Finance.

Riot previously requested a special meeting to propose changes to the Bitfarms board, expressing continued interest in shaping the company’s strategic direction. Amid these developments, Bitfarms has also undergone leadership changes, including the appointment of Ben Gagnon as CEO and Brian Howlett as independent chairman of the board.

Nicolas Bonta, the co-founder of Bitfarms and at the center of the takeover battle against Riot, also recently resigned from the board.

Bitfarms seeks new ways to counter takeover bids

In the meantime, Bitfarms is attempting to respond to regulatory challenges and recent legal decisions that impacted its shareholder rights plans during the takeover bid. To address these issues, Bitfarms has launched a “new rights plan” designed to ensure fair treatment for all shareholders in the event of an unwanted takeover attempt.

The new plan includes safeguards against “secret bids”, where a buyer gradually accumulates 20% or more of a company’s shares through exempt purchases. The plan, which runs for six months, allows existing shareholders to buy additional shares at a discount, which would reduce any potential buyer’s stake and protect shareholder interests.