Riot Proposes Acquisition of Bitfarms to 'Create the World's Largest Publicly Listed Bitcoin Miner'
Riot Platforms has announced a proposal to acquire Bitfarms to create “the world’s largest publicly listed bitcoin miner.” This offer includes cash and Riot stock, representing a 24% premium. Despite the initial rejection from Bitfarms’ Board, the proposal will be directly presented to shareholders. Riot asserts that the acquisition will establish a vertically integrated, geographically diversified operation with robust financial backing for growth plans.
‘Combination of Bitfarms and Riot Would Create the Premier and Largest Publicly Listed Bitcoin Miner Globally’
Riot Platforms Inc. (Nasdaq: RIOT) announced Tuesday that it has made a proposal to acquire Bitfarms Ltd. (Nasdaq/TSX: BITF) “to create the world’s largest publicly listed bitcoin miner.” Under the proposal, Riot will acquire all outstanding shares of Bitfarms for $2.30 per share, representing a 24% premium over Bitfarms’ one-month average share price. Riot has also accumulated a 9.25% stake in Bitfarms, becoming its largest shareholder. The offer, valued at approximately $950 million in total equity, includes cash and Riot stock, potentially giving Bitfarms shareholders 17% of the combined company.
Benjamin Yi, Executive Chairman of Riot, stated:
A combination of Bitfarms and Riot would create the premier and largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term growth.
The proposed combination is advantageous for shareholders of both companies, Riot explained, adding that this acquisition would form a vertically integrated bitcoin mining company with up to 1.5 GW of power capacity and 52 EH/s self-mining capacity by year-end. The combined entity would operate 15 facilities across the U.S., Canada, Paraguay, and Argentina, offering geographic diversification and favorable energy arrangements. “Riot is confident that a combined company will drive further strategic and financial benefits to both sets of shareholders,” the company asserted.
Initially, the proposal was submitted privately to the Bitfarms Board on April 22. However, it was rejected without meaningful engagement, Riot described. Recent allegations from a lawsuit by Bitfarms’ terminated CEO raise concerns about the directors’ commitment to shareholders’ best interests. Consequently, Riot is presenting its proposal directly to Bitfarms shareholders. Following the Annual General and Special Meeting on May 31, Riot plans to call a Special Meeting to introduce new independent directors to the Bitfarms Board.
Jason Les, CEO of Riot, opined:
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.
“The abrupt termination of the Bitfarms CEO without a transition plan in place at a critical period of execution for Bitfarms and the industry, as well as the allegations, if accurate, regarding the actions of certain members of the Bitfarms Board set out in the lawsuit filed by that recently terminated CEO, raise serious governance questions,” Les added.
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