Riot Platforms has offered $950M to acquire its competitor Bitfarms at a 24% premium over its share price.
Bitcoin miner Riot Platforms has announced an offer to buy Bitfarms at a significant premium over its share price. Riot made an offer to its smaller Canadian competitor’s board on April 22 and is publicizing its intentions after that offer was rebuffed.
Colorado-based Riot is already Bitfarms’ largest shareholder, with a 9.25% stake. It has now offered combined cash and common stock to shareholders that would represent about $950 million in equity value, or a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24, 2024. Bitfarms shareholders would own about 17% of the combined company.
“New allegations in a lawsuit brought by Bitfarms’ recently terminated CEO, if accurate, raise serious questions about whether certain directors are committed to acting in the best interests of all shareholders.” Riot went on to specify co-founders Bonta and Emiliano Grodzki as the directors in question. It said it would requisition a special Bitfarms shareholders meeting after the company’s May 31 Annual General and Special Meeting to “add new, well-qualified and independent directors to the Bitfarms Board.”in net income in the first quarter of 2024 to reach $211 million. It has not released financial information since then.
According to Riot, a combined company would have the largest capacity of any publicly listed Bitcoin miner, with “approximately 1 GW of current power capacity and 19.6 EH/s of current self-mining capacity, with up to 1.5 GW of power capacity and 52 EH/s of self-mining capacity by year-end.
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