Bitfarms Ltd. and Riot Platforms Inc. have reached a settlement agreement prior to Bitfarms’ special shareholder meeting, scheduled for November 6. This development was announced in a press release dated September 23.
Details of the Settlement Agreement
As part of the settlement, Riot, which is Bitfarms’ largest shareholder, will retract its previous requisitions and support the expansion of Bitfarms’ Board of Directors. Furthermore, Riot has committed to a standstill agreement extending until 2026.
In addition, Andrés Finkielsztain has resigned from the Bitfarms board, with Amy Freedman being appointed as a new member. Amy will also participate in the Governance, Nominating, and Compensation Committees.
Board Expansion and Voting
During the special shareholder meeting, Riot has agreed to cast its vote in favor of increasing the board size from five to six members. Shareholders will also be asked to elect an independent director and ratify Bitfarms’ shareholder rights plan.
This agreement, which includes Riot’s withdrawal of its requisition, marks a significant collaborative effort between the two companies. Riot’s CEO, Jason Les, commented that this settlement represents “a crucial step towards enhancing shareholder value.”
The official agreement will be submitted to the US Securities and Exchange Commission and made available on SEDAR.
Resolution of the Tensions
This settlement concludes a period of contention between Bitfarms and Riot, which arose from Riot’s attempts to sway Bitfarms’ Strategic Alternatives Review Process alongside its proposed acquisition.
Riot criticized Bitfarms’ corporate governance and made a non-binding proposal to buy the company; however, Bitfarms rejected this, citing Riot’s approach as opportunistic and seeking to purchase the company at a undervalued price.
To guard against such maneuvers, Bitfarms implemented a Shareholder Rights Plan in June, often referred to as a “poison pill,” aimed at preserving the integrity of its strategic review and safeguarding against undue influence from Riot.
Looking Forward
While Riot’s aggressive strategies reflect its ambitions in the fiercely competitive Bitcoin mining sector, Bitfarms has concentrated on protecting its shareholders and pursuing sustainable growth through its strategic review process.
The current settlement can be viewed as a positive development toward alleviating the previous tensions, as both companies strive to optimize shareholder value moving forward.