Riot Platforms Offers $950 Million Acquisition of Bitfarms

Mining firm Riot Platforms has proposed to the board of directors of rival Bitfarms an offer to purchase all publicly traded shares at a price of $2.30 each.

Riot Proposes to Acquire Bitfarms for US$2.30 Per Share to Create the World’s Largest Publicly Listed Bitcoin Miner.

Read the full press release here: https://t.co/SnBijrL3i7

For disclaimers, please visit: https://t.co/6RQFSK9MKb.

— Riot Platforms, Inc. (@RiotPlatforms) May 28, 2024

The proposed purchase price offers a 20% premium over the volume-weighted average price for the month.

The stated price is 24% higher than the closing value on April 19, the last business day before Riot’s initial private approach to Bitfarms’ board regarding the acquisition. As of May 28, the total offer amounted to approximately $950 million.

At that time, Riot had accumulated 9.25% of the competitor’s shares, making it the largest shareholder.

On May 29, Riot announced it had purchased an additional 0.75% of the outstanding shares on the open market at ~$2.19, increasing its stake in Bitfarms to 10%.

Riot Platforms, Inc. Reports Beneficial Ownership of 10% in Bitfarms Ltd.

For more information, please visit: https://t.co/3mCoymvZ0L.

— Riot Platforms, Inc. (@RiotPlatforms) May 29, 2024

“The initial proposal was privately submitted to the Bitfarms board of directors on April 22, 2024. However, the board rejected it without engaging in substantive dialogue. Furthermore, new allegations in a lawsuit filed by a recently dismissed CEO, if accurate, raise serious questions about whether some directors are prepared to act in the interests of all shareholders,” the press release stated.

Riot hopes to nominate “new, highly qualified, and independent directors” to the board following the shareholders’ meeting scheduled for May 31.

The company outlined several benefits of the proposed acquisition:

• Creation of the world’s largest vertically integrated bitcoin miner — the combined company’s capacity will reach 1.5 GW with a hash rate of 52 EH/s by year-end;
• Geographic diversification — the enterprise will manage a total of 15 data centers in the US, Canada, Paraguay, and Argentina with access to 2.2 GW;
• Utilization of Riot’s strong financial position — the company holds $700 million in cash and 8,872 BTC, roughly 10 times the corresponding figures for Bitfarms.

In January, CoinShares experts classified Bitfarms among the few mining enterprises expected to remain profitable post-halving, even with bitcoin prices around $40,000.

In May, Bernstein specialists noted that major American public miners like Marathon Digital, Riot, and CleanSpark increased their share in the hash rate following the block reward reduction in April. Analysts suggested that companies will continue market expansion through organic growth, including mergers and acquisitions.

Earlier, US miners reported a decline in bitcoin production by the end of April.