You Cannot Miss This: Riot Platforms Moves to Acquire Bitfarms in a Bold Move
Riot Platforms Inc. has made waves by securing a significant stake in Bitfarms Ltd. The company is now eyeing a public takeover bid for the Canadian Bitcoin miner, showcasing concerns about Bitfarms’ corporate governance amid recent management changes.
Riot’s Generous Bid for Bitfarms Acquisition
– Riot’s offer values Bitfarms at approximately $950 million, proposing $2.30 per share in cash and stock
– Despite Bitfarms trading around $2, Riot’s bid only offers a 15% premium, drawing criticism from experts
– Merger and Acquisition advisor Danny Marques believes that Riot’s offer is on the lower end and expects Bitfarms to entertain offers in the range of $2.75-3.00
The Strategic Move in a Shifting Crypto Landscape
– The recent Bitcoin halving has significantly reduced miners’ rewards, leading to anticipated losses
– Large mining entities, including Riot, are considering mergers and acquisitions to sustain profitability
– The industry may consolidate around major players like Riot, Marathon Digital, CleanSpark, and Cipher Mining for improved efficiency
Riot’s Potential to Create the Largest Bitcoin Miner
– A merger between Riot and Bitfarms would establish a global Bitcoin mining powerhouse
– This consolidation would position Riot alongside industry leaders like Marathon Digital and CleanSpark
Following the announcement of the potential merger, Bitfarms’ shares surged by 9.35% in pre-market trading on Tuesday.
Challenges Faced by Bitfarms
– Bitfarms terminated its interim CEO recently amidst internal turmoil
– The company is grappling with management issues, potentially influencing Riot’s acquisition efforts
Riot’s Persistence in Acquiring Bitfarms
– Riot initially proposed a takeover bid to Bitfarms’ board in April, which was promptly rejected
– Under Riot’s offer, Bitfarms shareholders would own around 17% of the combined entity
– Riot’s Executive Chairman, Benjamin Yi, is optimistic about the proposal’s attractiveness to Bitfarms’ shareholders
Riot is also planning to appoint new independent directors after Bitfarms’ annual meeting on May 31 for a smooth transition and integration.
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