Riot Proposes to Acquire Bitfarms for $2.30 Per Share

Riot
Platforms
Proposes
to
Acquire
Bitfarms
for
$2.30
Per
Share

CASTLE
ROCK,
Colo.
–
Riot
Platforms,
Inc.
(NASDAQ:
RIOT)
announced
a
proposal
to
acquire
all
outstanding
shares
of
Bitfarms
Ltd.
(NASDAQ/TSX:
BITF)
at
$2.30
per
share.
This
acquisition
aims
to
create
the
largest
publicly
listed
Bitcoin
miner
in
the
world,
according
to
Riot
Platforms.

The
proposed
acquisition
price
represents
a
24%
premium
to
Bitfarms’
one-month
volume-weighted
average
share
price
as
of
May
24,
2024,
and
a
20%
premium
to
Bitfarms’
share
price
on
April
19,
2024.
The
overall
value
of
the
proposal
is
approximately
$950
million
in
total
equity
value.

Strategic
Rationale
for
the
Acquisition

The
proposed
acquisition
is
intended
to
offer
significant
benefits
to
both
Riot
and
Bitfarms
shareholders.
The
combination
would:

• Create
  the
  largest
  Bitcoin
  miner
  globally,
  with
  approximately
  1
  GW
  of
  current
  power
  capacity
  and
  19.6
  EH/s
  of
  current
  self-mining
  capacity.
  By
  year-end,
  the
  combined
  entity
  aims
  for
  up
  to
  1.5
  GW
  of
  power
  capacity
  and
  52
  EH/s
  of
  self-mining
  capacity.
• Provide
  geographic
  diversification,
  with
  15
  facilities
  across
  the
  United
  States,
  Canada,
  Paraguay,
  and
  Argentina.
  The
  combined
  company
  would
  have
  up
  to
  2.2
  GW
  of
  total
  power
  capacity
  when
  fully
  developed.
• Leverage
  Riot’s
  strong
  financial
  profile,
  including
  more
  than
  $700
  million
  in
  cash
  and
  8,872
  unencumbered
  Bitcoin,
  to
  drive
  future
  growth
  for
  Bitfarms.

Governance
Concerns
and
Shareholder
Actions

The
proposal
was
privately
delivered
to
the
Bitfarms
Board
on
April
22,
2024,
but
was
rejected
without
substantive
dialogue.
New
allegations
in
a
lawsuit
by
Bitfarms’
recently
terminated
CEO
raise
questions
about
the
Board’s
commitment
to
shareholder
interests.
Riot
plans
to
requisition
a
Special
Meeting
of
Bitfarms’
shareholders
to
add
new,
independent
directors
to
the
Board,
following
Bitfarms’
Annual
General
and
Special
Meeting
on
May
31,
2024.

Benjamin
Yi,
Executive
Chairman
of
Riot,
stated,
“A
combination
of
Bitfarms
and
Riot
would
create
the
premier
and
largest
publicly
listed
Bitcoin
miner
globally.
We
are
confident
that
Bitfarms’
shareholders
will
see
this
proposal
as
a
more
attractive
alternative
than
its
standalone
trajectory.”

Jason
Les,
CEO
of
Riot,
expressed
concerns
about
Bitfarms’
Board
governance,
noting
the
abrupt
termination
of
the
CEO
without
a
transition
plan
and
allegations
against
Board
members.
Les
emphasized
the
need
for
governance
changes
to
maximize
shareholder
value.

Proposal
Details
and
Future
Steps

The
proposal
includes
a
mix
of
cash
and
Riot
common
stock,
resulting
in
Bitfarms’
shareholders
owning
up
to
approximately
17%
of
the
combined
company.
The
Proposal
is
non-binding
and
subject
to
customary
conditions,
including
entering
into
a
definitive
transaction
agreement.

Citi
is
serving
as
the
financial
advisor,
and
Paul,
Weiss,
Rifkind,
Wharton
&
Garrison
LLP
and
Davies
Ward
Phillips
&
Vineberg
LLP
are
serving
as
legal
advisors
to
Riot
for
this
transaction.

For
more
details,
visit
the
official
Riot
Platforms
website
at

www.riotplatforms.com.

Image
source:
Shutterstock

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