Riot proposes takeover after accumulating 9.25% stake in rival Bitfarms
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The share price of Bitfarms (BITF) has jumped up 5% after Texas-based Riot Platforms published a proposal intending to take over the Canadian bitcoin mining rival.
Riot said on Tuesday that it has proposed to the board of directors of Bitfarms to acquire all of its outstanding shares at $2.3 per share with a total equity value of $950 million. In addition, Riot said it has accumulated a 9.25% stake in Bitfarms, becoming its largest shareholder.
Bloomberg first reported Riot’s takeover proposal on Tuesday. Following Riot’s publication of the plan, the stock price of BITF is changing hands at $2.12 as of writing. It was initially up over 11% at $2.2 during the pre-market trading on Tuesday but has since retreated after the market opened.
Riot’s publication of the plan also comes a month after an initial outreach to Bitfarms was said to be rejected without “engaging in substantive dialogue.” Bitfarms recently fired its interim CEO before completing an executive search and transition.
“This is not the first time we have expressed an interest in discussing a potential combination with you, and after repeated attempts to do so have not progressed, we have decided to publicly disclose our proposal,” Riot’s chairman Benjamin Yi and CEO Jason Les wrote in a letter addressing to Bitfarms’ board of directors, adding:
“Bitfarms’ shareholders should have the opportunity to decide if they prefer the substantial premium and high degree of certainty offered by our proposal, or if they would rather continue to accept the significant risk that Bitfarms can realize its full potential for shareholders through the execution of its strategic plan given Bitfarms’ problematic governance structure and the Board’s recent concerning actions.
Riot’s offer, if materializes eventually, could create a single bitcoin mining company that owns proprietary infrastructure across the Americas with 20 EH/s of combined hashrate.
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