Bitcoin mining giant Riot has announced its decision to abandon its hostile takeover bid of Canadian mining firm Bitfarms. The proposal, which aimed to acquire Bitfarms for $2.30 per share, has been withdrawn due to Bitfarms' strong opposition and successful implementation of a "poison pill" shareholder rights defense.

Riot, however, is not giving up on its pursuit. Instead, the American mining behemoth plans to shift its efforts towards purging Bitfarms' leadership in order to instill directors more open to potential deals. This move is seen as an attempt to bring "fresh perspectives" to the company.

In a statement released today, Riot expressed its belief that a combination of Bitfarms and itself would create the premier and largest publicly listed Bitcoin miner globally. However, engaging with Bitfarms' current board on a potential merger has proven to be impossible.

Riot currently holds a 14.9% stake in Bitfarms, making it the largest shareholder. In April, Riot approached Bitfarms with an acquisition offer, only to be quickly rejected by Bitfarms who dismissed the bid as too low. Subsequently, Riot took a more aggressive approach, acquiring a 9.25% ownership stake in Bitfarms through stock purchases and publicly announcing its determination to acquire the company.

The situation between the two mining giants became more complex in the following weeks. Riot continued to acquire Bitfarms' stock, while Bitfarms announced its planned expansion into the United States for the first time. Additionally, Bitfarms' CEO, Geoffrey Morphy, was dismissed after he filed a $27 million lawsuit against the company for breach of contract.

Riot has seized on the narrative that Bitfarms' operations have fallen into chaos, portraying the current leadership as self-serving and out of touch. The company believes that the current corporate governance at Bitfarms is broken and cannot be allowed to continue.

To take control of the company, Riot has called for a special shareholder meeting to vote on replacing Bitfarms' current board. The proposed replacements are John Delaney, the former mayor of Jacksonville, Amy Freedman, a former investment banker and corporate advisor, and Ralph Goehring, an energy industry executive.

Following the news of Riot's withdrawal of its takeover bid, Bitfarms' stock plummeted nearly 9%, reaching $2.68 at the time of writing. Similarly, Riot's stock saw a decline of almost 4%, with shares priced at $9.22.

Representatives for both Riot and Bitfarms have been reached out to for comments, but responses from either company have not been received at this time. The future of Bitfarms remains uncertain as the potential for a major shake-up in leadership looms.