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Riot Platforms Inc. (RIOT) has sent shockwaves through the Bitcoin mining industry with a proposal to acquire all outstanding shares of Bitfarms Ltd. (BITF). This audacious move, if successful, would create the world’s largest publicly listed Bitcoin mining company. 
The offer sits at US $2.30 per Bitfarms share, representing a tempting 24% premium over Bitfarms’ one-month average share price as of MAy 24. The Proposal represents approximately US$950 million in total equity value. 
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 Riot Proposes to Acquire Bitfarms for US$2.30 Per Share to Create the World’s Largest Publicly Listed Bitcoin Miner. Read the full press release here: <a href="https://t.co/SnBijrL3i7" target="_blank">https://t.co/SnBijrL3i7</a> For disclaimers, please visit: <a href="https://t.co/6RQFSK9MKb" target="_blank">https://t.co/6RQFSK9MKb</a>.— Riot Platforms, Inc. (@RiotPlatforms) <a href="https://twitter.com/RiotPlatforms/status/1795433400519585980?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">May 28, 2024</a>
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The <a href="https://www.riotplatforms.com/riot-proposes-to-acquire-bitfarms-for-us2-30-per-share-to-create-the-worlds-largest-publicly-listed-bitcoin-miner/" target="_blank" rel="noreferrer noopener">proposal</a> consists of cash and Riot common stock, with Bitfarms owners owning up to about 17% of the combined business.&nbsp; Riot Platforms is already Bitfarms’ largest shareholder, holding a 9.25% stake. 
This cash and stock proposal would provide Bitfarms shareholders with a significant premium and immediate cash value, as well as significant future value creation opportunities through participation in a financially and commercially stronger company with a well-defined strategy, led by an established and proven management team. 
Interestingly, Bitfarms reportedly rejected Riot’s initial proposal in April without significant negotiations. Riot expresses concern that Bitfarms’ board may not be acting in the shareholders’ best interests and is planning to call a special shareholder meeting to propose new board members. 
The potential benefits of the merger are significant. The combined company would boast a staggering mining capacity of 19.6 EH/s currently, with projections reaching a mind-blowing 52 EH/s by year-end. Additionally, Riot believes its robust financial health would provide a major boost to Bitfarms’ growth plans. 
Additionally, Riot believes its robust financial health would provide a major boost to Bitfarms’ growth plans. 
Beyond the immediate capacity increase, the merger promises a geographically diverse mining network. The combined entity would hold a presence across 15 facilities in the United States, Canada, Paraguay, and Argentina. With a total power capacity reaching 2.2 GW upon full development, this global footprint grants significant advantages. The diversification allows for expansion into regions with favorable energy arrangements, ensuring long-term growth prospects. 
Bitfarms stands to benefit greatly from Riot’s financial muscle. Riot boasts a strong balance sheet with minimal corporate debt. They hold a war chest exceeding US$700 million in cash and a significant stockpile of unencumbered Bitcoin over 8,872 as of April 30, 2024, both dwarfing Bitfarms’ reserves by a factor of ten. 
This financial strength allows Riot to fully bankroll Bitfarms’ future growth plans. Additionally, Riot believes the merged company’s financial profile will unlock greater access to public equity markets for Bitfarms, similar to the advantages Riot enjoys today. 
Benjamin Yi, Executive Chairman of Riot, said, “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. We were disappointed to learn that the Bitfarms Board rejected our compelling Proposal without engaging in substantive dialogue with us. 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.” 
Riot’s Board of Directors unanimously authorized the proposed acquisition of Bitfarms. While the Proposal is non-binding and subject to customary circumstances (including entering into a definitive transaction agreement), any transaction would not be subject to a financing condition nor requires a Riot shareholder vote. There is no guarantee that a transaction between Riot and Bitfarms will be completed. 
For Bitfarms shareholders, the deal presents a clear opportunity. They would receive a premium on their shares and the chance to be part of a potentially dominant force in the Bitcoin mining landscape. However, the proposal faces challenges. Bitfarms’ board rejection and potential internal governance issues within Bitfarms could act as roadblocks. 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 Also Read: <a href="https://www.cryptotimes.io/2024/05/16/oklahoma-law-creates-legal-framework-for-crypto-miners/" target="_blank" rel="noreferrer noopener">Oklahoma Law Creates Legal Framework for Crypto Miners</a> 
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Riot Platforms Makes Bold Bid to Acquire Bitfarms

The Crypto Times

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