Riot reduces number of nominees to Bitfarms board to two in letter to shareholders
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Riot Platforms (NASDAQ:RIOT) reduced the number of its nominees for Bitfarms’ (NASDAQ:BITF) board to two from three, the company said on Tuesday in a letter that still seeks corporate governance changes at the bitcoin miner.
In an open letter to Bitfarm (BITF) shareholders, Riot (RIOT) also cautioned Bitfarms not to take any further actions to entrench its existing board before an Oct. 29 special meeting.
Riot (RIOT) currently owns 19.9% of Bitfarms (BITF), making it the company’s largest shareholder. Since Riot started its campaign to add three directors to Bitfarms’ board, two directors stepped down from Bitfarms’ board, two new members were named, and the company appointed a new chairman, along with other executive leadership changes.
“While these changes represent a step in the right direction, they have been reactive and insufficient to address Bitfarms’ broken governance,” the letter said. “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.”
In the letter, Riot (RIOT) also criticized Bitfarms’ (BITF) shareholder rights plan, known as a poison pill, and its proposed acquisition of Stronghold Digital Mining (SDIG) at a greater than 100% premium to SDIG’s shares price on the day before the announcement.
It also contended that Bitfarms (BITF) hasn’t been willing to engage with Riot (RIOT) to consider changes to its board and/or a combination with Riot (RIOT) that could maximize value for BITF shareholders.
In June, Riot (RIOT) withdrew its $2.30 per share offer for Bitfarms (BITF), and instead, sought to place three directors on Bitfarms’ board. At that time, RIOT held an almost 15% stake in Bitfarms.
In premarket trading, Riot (RIOT) stock slipped 0.4% and Bitfarms (BITF) stock was unchanged at $2.16.