Riot Platforms has put forward a proposition to acquire Bitfarms in order to establish itself as the biggest publicly listed bitcoin miner in the world. The offer includes both cash and Riot stock, with a 24% premium. Although Bitfarms’ board initially rejected the proposal, it will now be presented directly to shareholders. Riot believes that the acquisition will create a vertically integrated and geographically diverse operation, with strong financial support for future growth plans.
Riot Platforms Inc. (Nasdaq: RIOT) announced on Tuesday its proposal to acquire Bitfarms Ltd. (Nasdaq/TSX: BITF) with the aim of creating the largest publicly listed bitcoin miner globally. Under the proposal, Riot will purchase all outstanding shares of Bitfarms for $2.30 per share, which represents a 24% premium over Bitfarms’ average share price for the past month. Riot has also acquired a 9.25% stake in Bitfarms, making it the company’s largest shareholder. The offer, valued at around $950 million in total equity, includes cash and Riot stock, potentially granting Bitfarms shareholders a 17% stake in the combined company.
Benjamin Yi, Executive Chairman of Riot, stated:
“The combination of Bitfarms and Riot would result in the premier and largest publicly listed bitcoin miner worldwide, with operations that are geographically diverse and well-positioned for long-term growth.”
According to Riot, the proposed merger would benefit shareholders of both companies. The acquisition would create a vertically integrated bitcoin mining firm with a power capacity of up to 1.5 GW and a self-mining capacity of 52 EH/s by the end of the year. The combined entity would operate 15 facilities across the United States, Canada, Paraguay, and Argentina, providing geographical diversity and favorable energy arrangements. The company confidently asserts that a merged company would bring strategic and financial advantages to both sets of shareholders.
Initially, the proposal was privately submitted to the Bitfarms Board on April 22, but it was rejected without any meaningful discussion, as described by Riot. Recent allegations made by Bitfarms’ former CEO in a lawsuit have raised concerns about the directors’ commitment to the best interests of shareholders. Consequently, Riot will present its proposal directly to Bitfarms shareholders. After the Annual General and Special Meeting on May 31, Riot intends to hold a Special Meeting to introduce new independent directors to the Bitfarms Board.
Jason Les, CEO of Riot, expressed his opinion:
“We are deeply concerned that the founders on the Bitfarms Board – Nicolas Bonta and Emiliano Grodzki – may not be acting in the best interests of all Bitfarms shareholders.”
Les added, “The sudden termination of the Bitfarms CEO without a transition plan during a critical period for Bitfarms and the industry, as well as the allegations made by the recently terminated CEO in the lawsuit, raise serious questions about governance.”
What are your thoughts on Riot Platforms’ proposal to acquire Bitfarms and create the largest publicly listed bitcoin miner in the world? Let us know in the comments section below.
