Riot Platforms has intensified its efforts to acquire rival Bitcoin miner Bitfarms by issuing an open letter to the firm’s shareholders on Sept. 3.

In the letter, Riot announced that it had lowered its request for board seats at Bitfarms to two independent directors following recent removals while also criticizing several of the company’s recent decisions.

Criticism of Stronghold acquisition

Riot raised concerns about Bitfarms’ recent acquisition of Stronghold, a deal valued at $175 million. According to the firm, this transaction represented a premium of over 100% compared to Stronghold’s closing share price the day before the announcement.

Riot pointed out that no other industry player was willing to pay such a high price for Stronghold, which had been effectively “for sale” for a considerable period.

Considering this, Riot stated that the deal was not in the best interests of Bitfarms shareholders and urged the smaller miner not to enter into any financing transaction before the completion of the October special meeting. It added:

“Riot is deeply concerned that any transaction the current Bitfarms Board will pursue will be punitively dilutive to all Bitfarms’ shareholders when there are other more attractive financing options available.”

Proposed board changes

Riot, holding nearly 20% of Bitfarms, had initially demanded three seats on the smaller company’s board. However, due to recent progress in addressing Bitfarms’ founder-led board culture, Riot reduced its request to two seats.

Riot has proposed Amy Freedman and John Delaney as candidates to replace two existing directors, co-founder Andres Finkielsztain and Fanny Philip. Riot emphasized that Finkielsztain, one of Bitfarms’ three co-founders, is partly responsible for its perception of the company’s troubled CEO succession process, which has seen five CEOs in five years.

Riot assured that its nominees are entirely independent of both companies. It stated they would bring valuable public company board experience, corporate governance oversight, and transaction expertise to the Bitfarms Board.

Last month, Bitfarms co-founder and chairman Nicolas Bonta stepped down amid broader leadership changes. This followed the earlier departure of another co-founder, Emiliano Grodzki, who was voted off the board at Bitfarms’ most recent annual meeting.