Bitcoin mining giant Riot Platforms has announced a proposal to acquire Bitfarms, aiming to create the world’s largest publicly listed Bitcoin miner. This offer, which includes cash and Riot stock, represents a 24% premium over Bitfarms’ one-month average share price. Despite an initial rejection from Bitfarms’ Board, Riot plans to present the proposal directly to shareholders.
Riot, based in Colorado, currently holds a 9.25% stake in Bitfarms, making it the company’s largest shareholder. The proposed acquisition, valued at approximately $950 million, would give Bitfarms shareholders 17% ownership of the combined company.
Riot stated that the merger would create a vertically integrated, geographically diversified operation with robust financial backing. The combined entity would boast up to 1.5 gigawatts of power capacity and 52 exahash per second (EH/s) self-mining capacity by the end of 2024, operating 15 facilities across the U.S., Canada, Paraguay, and Argentina.
Riot initially presented the proposal privately to Bitfarms’ Board on April 22, but it was rejected without substantial engagement. Following the dismissal of Bitfarms’ CEO Geoffrey Morphy and his subsequent lawsuit against the company, Riot expressed concerns about the board’s commitment to shareholder interests. Riot’s CEO, Jason Les, emphasized these concerns, highlighting governance issues and the abrupt termination of Morphy without a transition plan.
The acquisition proposal comes at a critical time for both companies. Bitfarms has been undergoing a costly technical upgrade and recently achieved a hashrate milestone of 5 EH/s. However, the company’s earnings dropped 29% year-on-year in April. Riot, on the other hand, reported a 131% increase in net income for the first quarter of 2024, reaching $211 million.
Riot plans to call a Special Meeting of Bitfarms shareholders after the company’s Annual General and Special Meeting on May 31, aiming to introduce new, independent directors to the Bitfarms Board.
If successful, this acquisition would establish the combined company as a leading force in the Bitcoin mining industry, with substantial power and self-mining capacities and significant geographic and operational diversification.
