The proposal outlines a deal that encompasses roughly 9% of iFinex’s outstanding capital and assigns a value of $1.7 billion to the company.
As per the latest report, the parent firm of the Bitfinex exchange – iFinex Inc – has started exploring a $150 million share buyback, as per the letter written to shareholders on September 22. The directors of iFinex have proposed an offer of $10 per share for 15 million shares.
The document notes that a group of directors within iFinex and its subsidiaries are eligible to participate in the buyback. Among them, is Giancarlo Devasini, who previously worked as a plastic surgeon and currently serves as the Chief Financial Officer for both Tether and Bitfinex.
It is worth noting that there is no specified minimum threshold for the number of shares to be offered for sale to trigger the buyback. iFinex is prepared to purchase as many shares as are made available until the maximum limit is reached. The company determined its valuation internally, using a variety of business metrics, without seeking validation from an independent third party. Shareholders need to express their intent to sell their holdings to iFinex by October 24.
Details of the Bitfinex Share Buyback
The proposal outlines a deal that encompasses roughly 9% of iFinex’s outstanding capital and assigns a value of $1.7 billion to the company. This agreement is contingent on the business securing an infusion of funds from at least one of its subsidiaries.
The offer is extended to shareholders who acquired iFinex stock through a 2016 swap arrangement with the investment platform BnkToTheFuture. In that year, Bitfinex experienced a hack resulting in the theft of approximately $71 million worth of Bitcoin, a sum now valued at approximately $3.3 billion. To compensate affected users, Bitfinex issued BFX tokens, which iFinex redeemed later in exchange for company shares through BnkToTheFuture.
The decision to initiate the buyback is due to the “positive performance” exhibited by the company in recent years, as stated by iFinex in a communication to Bloomberg News. Tether emphasized its separate identity from iFinex, albeit sharing common shareholders. Simon Dixon, the CEO of BnkToTheFuture, declined to comment on confidential client information.
By selling their shares back to iFinex, investors can alleviate the increasing demands placed on them to provide information in support of Bitfinex Group’s regulatory applications and to address heightened scrutiny. Additionally, this move allows them to exit a relatively illiquid investment.