Canada-based Bitfarms has rejected a takeover bid from Riot Platforms, stating that the offer "significantly undervalues" the company and its prospects for growth. Bitfarms announced on Wednesday that it would not accept Riot Platforms' proposal to purchase all common shares of the Bitcoin miner for $2.30 per share, a bid that followed Riot's acquisition of a 9.25% stake in Bitfarms.

According to Bitfarms, a Special Committee of the Board comprised solely of independent directors was formed to review the proposal first received on April 22 and concluded that the offer price did not reflect the true value of the company. "A committee of the board considering the approach determined it significantly undervalues the company and its growth prospects," stated the Toronto-based firm.

In a response to Riot's proposal, Bitfarms stated that they had requested standard confidentiality and non-solicitation protections to engage further with Riot. These protections would have facilitated a private and exclusive negotiation setting.

Despite the rejection, Bitfarms' shares saw an increase in value during early trading on Wednesday, rising nearly 5% to $2.31. This surge came after the stock closed at $2.21 on Tuesday, which was 4% below the offer price from Riot. The stock had experienced fluctuations, dipping as low as $1.60 in early May, only to recover to over $2.00 by May 24.

The company has been considering various strategic alternatives advised by the investment bank Moelis, which was hired as a financial adviser. These alternatives include continuing with the current business plan, exploring a potential strategic business combination, or even the sale of the company.

Bitfarms has previously announced expansion plans, aiming to achieve a mining capacity of 21 EH/s (exahash per second) by the end of 2024, with an improved fleet efficiency of 21 J/TH (joules per terahash). The company maintains that pursuing these growth plans will best serve to maximize shareholder value.

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