PANews reported on August 21 that according to Bloomberg, people familiar with the matter revealed that Bitcoin mining company Bitfarms Ltd. is negotiating to acquire Stronghold Digital Mining Inc. for approximately US$164 million, while also resisting the acquisition attempt of Riot Platforms Inc. People familiar with the matter said that Stronghold shareholders will receive approximately 2.5 shares of Bitfarms stock for each share held. The transaction includes assumed debt.
Stronghold, which announced in May that it was considering a sale of the company and other alternatives, has a market value of about $66 million. The Kennedale, Pennsylvania-based company burns waste coal to generate electricity to power its mining operations. The company had revenue of $19.1 million in the second quarter and a loss of $21.3 million. Bitfarms had revenue of $41.5 million in the second quarter. The merger will provide Bitfarms with more access to electricity through Stronghold, which has its own power generation and interconnection to the local grid, thereby enhancing its mining capabilities.
Riot, which holds nearly 19% of Bitfarms, has made an unsolicited $950 million takeover offer. Bitfarms rejected its takeover proposal in April. In response to the takeover attempt, Bitfarms adopted a "poison pill" defense strategy to prevent a hostile takeover. The company is scheduled to hold a special shareholders meeting on October 29 after Riot attempted to replace three board members with candidates recommended by it.