The May 28 release not only reveals the acquisition proposal made to Bitfarms but also highlights the objective, impact, conditions, and criteria for the acquisition. Over this period, Riot Platform has accumulated a 9.25% stake in Bitfarms and became the largest shareholder to get involved in the decision-making process for the organization.
Benjamin Yi, the executive chairman, has shared his optimism about the combined organization, stating, “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.”
Moreover, Jason Les, CEO of Riot Platform, took to his X account to share proposal details and further developments in the acquisition process as a thread to his announcement post.
Key Information: https://t.co/C5MeNlw1Xz
— Jason Les (@JasonLes_) May 28, 2024
Today, @RiotPlatforms announced it has accumulated a 9.25% stake in @Bitfarms_io and made a proposal to the Bitfarms’ Board of Directors to acquire Bitfarms, which, if successful, would create the world’s largest publicly-traded Bitcoin… https://t.co/HZ9mjLy5Rl
Enclosures of Proposal
The proposed plan represents a 24% premium to Bitfarms’ one-month volume-weighted average share price as of May 24, 2024. It will hold a 20% premium to Bitfarms’ share price on April 19, 2024, as it was the last day before the initial proposal to Bitfarms from Riot Platforms. The current proposal will cost around $950 Million to Riot Platforms in total equity value.
The proposal considerations are designed in such a way that, in the combined organization, Bitfarms shareholders will own 17% of the company.
How Bitfars Reacted to the Proposal
After the initial proposal that was made on April 22, 2024, the Bitfarms Board rejected it without further discussion with Riot Platforms Ltd.
During the same time, Bitfarms also terminated their CEO, Murphy, reportedly, and Nicolas Bonta, who is serving as interim president and CEO until the board finalizes the new CEO.
The RIOT officials believe that certain directors were not acting in the shareholders’ best interests, as reflected by the recent change in management. Thus, Riot Platforms has decided to present the proposal directly to its shareholders.
The meeting with shareholders is scheduled after the upcoming Annual General and Special Meeting of Bitfarms, which is scheduled for May 31. The meeting will discuss adding new, well-qualified, independent directors to the Bitfarms Board.
Objectives and implications of Combined organization:
– It will become the largest Bitcoin miner globally. The acquisition will build a vertically integrated Bitcoin mining company with a current power capacity of 1 GW and 19.6 EH/s of self-mining capacity by year-end. Riot is confident about synergies and expects they will bring strategic and financial development to shareholders of both companies.
– It will allow geographic diversification of mining facilities and promote long-term growth and expansion.
– The joint organization will benefit from the strong financial position of Riot platforms.
Impact on the Share prices of Riot Platforms and Bitfarm
Riot Platform (RIOT) has experienced a slight decrease in share price amid the rising trend of 0.29%, that is, $0.03 in absolute terms, leading to a share price of $10.34 at the time of writing. If the meeting is scheduled for May 31 and brings fruitful results on the acquisition proposal, it will boost the price surge.The Bitfarms’ shareholders’ positive reaction to the news of the proposal reflects a positive outlook for the acquisition and future of the company. The BITF prices have experienced a surge of 9.41% since the last trading day, leading to a price of $2.21 at press time.
