Bitfarms Ltd.’s shares rose as much as 5.3 per cent after Riot Platforms Inc. ratcheted up its takeover efforts by increasing its stake in the rival Bitcoin miner.
Riot announced Thursday that it has increased its holding of Bitfarms common shares to 14 per cent and that it plans nominate candidates for the board of directors.
Bitfarms instituted a so-called poison pill defense earlier this week that dilutes the equity of any entity that acquires 15 per cent or more of company’s common shares. The Toronto-based firm has said Riot’s earlier US$950 million takeover offer would “significantly undervalue” the company and its growth prospects.
Crypto miners have come under pressure to consolidate following an April update to the Bitcoin code, known as “the halving,” that will result in billions of dollars of lost revenue for miners of the digital asset. The firms compete for a fixed Bitcoin reward by solving mathematical puzzles using superfast computers. Large-scale miners have been looking for potential targets to expand as they adjust to the industry’s new economics.
Riot says it intends to call a shareholder meeting and nominate candidates to join Bitfarms’ board of directors. Riot has criticized the board and interim Chief Executive Officer Nicolas Bonta, stating that they have a “track record of poor corporate governance.”
Bitfarms shares have increased about 20 per cent this week. Shares of Riot fell about one per cent to $10.88 on Friday, and are down almost 30 per cent this year.
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