Bitfarms calls out Riot's 'misleading' letter ahead of special meeting

The mudslinging continues in the monthslong takeover battle between bitcoin miners Riot Platforms and Bitfarms.

On Tuesday, Riot Executive Chairman Benjamin Yi and CEO Jason Les expressed concern about Bitfarms’ recent governance changes and the proposed acquisition of Stronghold Digital ahead of a special meeting to vote on reconstituting Bitfarms’ board of directors. More specifically, the execs said Bitfarms' board changes were “reactive” and “insufficient” to address the company's governance issues.

“Bitfarms needs additional truly independent directors with the experience and expertise to ensure that decisions about the company’s strategy moving forward reflect what is best for all shareholders — not just what is best for legacy directors whose focus is maintaining their own positions,” Yi and Les wrote in a letter.

On Wednesday, Bitfarms issued a response to what it called "misleading" claims from Riot.

“The upcoming special meeting is not about corporate governance, as Riot has repeatedly positioned it to be, but rather about Riot attempting to acquire Bitfarms at a discounted price for the benefit of Riot shareholders, not Bitfarms shareholders," Bitfarms said in its statement. "Riot has declined to engage with us constructively – including by refusing to enter into a standard non-disclosure agreement with Bitfarms or put forth a revised proposal for our consideration – and has instead taken to public attacks and actions to harm the interests of other Bitfarms shareholders."

Since its initial takeover attempt in April, Riot has been buying up stock in Bitfarms to become its largest shareholder. Riot owns about 19.9% of Bitfarms. As of Wednesday's opening bell, Bitfarms' market capitalization was nearly $1.2 billion, justly slightly more than half that of Riot's. 

Bitfarms said Wednesday its recent board and leadership changes were made on behalf of shareholders and not for Riot's approval: "The Bitfarms team is best-in-class, comprising the right mix of skills and experience to effectively oversee the Company’s strategic plan. On the contrary, it is not clear how Riot’s nominees could enhance the Board."

Furthermore, the miner justified its proposed acquisition of Stronghold by noting the transaction could add up to 307 MW of power capacity and is expected to put Bitfarms on track to increase its energy portfolio to over 950 MW, with nearly 50% in the U.S., by the end of 2025.

Bifarms' Board will consider and respond to Riot’s amended requisition proposal in due course. The special meeting is scheduled for Oct. 29.