Riot Platforms offers $2.30 per share for Bitfarms to form the largest public bitcoin miner.
Riot Platforms, a leading bitcoin mining company, has recently proposed to acquire all outstanding shares of fellow miner Bitfarms for US$2.30 per share. This price represents a 24% premium over Bitfarms' one-month volume-weighted average as of May 24, 2024. Riot, which has become Bitfarms' largest shareholder with a 9.25% stake, disclosed its acquisition intentions after Bitfarms' board rejected the initial private offer, citing governance concerns.
Riot's announcement led to a nearly 6% increase in Bitfarms' shares, which were trading at $2.13 as of 14:00 UTC. The proposed acquisition, valued at approximately US$950 million, would result in Bitfarms' shareholders owning up to 17% of the combined entity. If successful, the merger would create the world's largest publicly listed bitcoin miner.
Riot's executive chairman, Benjamin Yi, expressed disappointment over Bitfarms' board's swift rejection of the offer and lack of engagement on the proposal's strategic and financial merits. CEO Jason Les added concerns about Bitfarms' corporate governance, referencing the abrupt termination of Bitfarms' CEO Geoffrey Morphy and subsequent allegations raised in a lawsuit he filed.
The combined company would boast a self-mining capacity of 19.6 EH/s, with a target increase to 52 EH/s by the year's end, and a significantly stronger financial position to support growth plans. The merger would bring together 15 facilities across the U.S., Canada, Paraguay, and Argentina.
Riot intends to request a Special Meeting of Bitfarms' shareholders to nominate new independent directors to Bitfarms' board. The offer is non-binding and subject to definitive agreement terms, with Riot stating that no financing condition would be attached and no Riot shareholder vote would be required.
Citi is acting as a financial advisor, with Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Davies Ward Phillips & Vineberg LLP serving as legal advisors to Riot. The outcome of the proposed transaction is uncertain, and it remains to be seen how Bitfarms' shareholders will respond to Riot's public offer.
