Table of Contents
Bitfarms (BITF) has rejected a $1 billion acquisition proposal from rival Riot Platforms but that hasn't stopped the Bitcoin miner from buying a stake.
Riot Platforms had planned to buy all of Bitfarms' outstanding shares at $2.30 each, marking a 24% premium on the one-month weighted average per share. In total, the deal was valued at $950 million.
The move comes after Bitcoin fired CEO Geoffrey Morphy earlier this month following his lawsuit against the firm in which he claimed $27 million in damages for breach of contract.
Benjamin Yi, executive chairman of Riot, said the move would position the firm as the biggest publicly listed Bitcoin miner.
“A combination of Bitfarms and Riot would create the premier and largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term growth," Yi said.
However, the board of directors at Bitfarm rejected the deal. "We were disappointed to learn that the Bitfarms Board rejected our compelling Proposal without engaging in substantive dialogue with us," Yi stated.
"While we have long respected Bitfarms’ business and management team, we are confident that Bitfarms’ shareholders will agree that this Proposal represents a significantly more attractive alternative for Bitfarms than its standalone trajectory.”
Nonetheless, Riot has purchased a 9.25% stake in Bitfarms, making it the largest shareholder. Riot also intends to requisition a special meeting of Bitfarms’ shareholders to nominate independent directors to the Bitfarms Board.
Riot's stock price is down 5% over the past five days whilst Bitfarms has seen its share price jump almost 19%.
Riot reported a company record for net income in Q1 2024 but failed to meet analysts' expectations for revenue.
In its most recent earnings announcement, Riot's net income came in at a record $211.8 million, marking a 1,000% increase from the same time last year.
Mining revenue also jumped 55.4% year on year due to Bitcoin's 131% increase in price. However, Riot's total revenue of $79.3 million fell 14% short of estimates.
Blockhead
