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HomeNewsRiot Platforms Announces Proposal to Acquire Bitfarms with Big Benefits

Riot Platforms Announces Proposal to Acquire Bitfarms with Big Benefits

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  • Riot platform intends to acquire all Bitfarms shares at a 24% premium.
  • The merger would result in the world’s largest Bitcoin miner.

Riot Platforms, Inc. just made a major proposal to the Bitfarms Board of Directors to buy all of the company’s remaining shares at $2.30 per share. With a 9.25% investment in Bitfarms, Riot is now the company’s largest stakeholder.

Offering Bitfarms shareholders a 24% premium over the 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 proposed acquisition values Bitfarms at almost $950 million total.

Proposal Details and Financial Implications

Bitfarms owners can own up to 17% of the amalgamated company thanks to the consideration that includes cash and Riot common stock.

This offers involvement in a financially and commercially strong company with a well-defined strategic direction, immediate cash value, and substantial potential for future value development.

The seasoned and successful management team at Riot is supposed to guide the united business successfully.

Riot had first quietly brought this idea to the Bitfarms Board on April 22, 2024. Without any real discussion, the board rejected it. Further casting doubt on the board’s dedication to the best interests of all shareholders are claims made in a lawsuit brought by Bitfarms’ recently ousted CEO.

Riot will therefore directly inform Bitfarms’ shareholders of its proposal and request a Special Meeting following Bitfarms’ Annual General and Special meetings on May 31, 2024.

Building a Global Bitcoin Mining Superpower

With about 1 GW of present power capacity and 19.6 EH/s of self-mining capacity, the suggested combination seeks to produce the biggest Bitcoin miner globally by year’s end, maybe growing to 1.5 GW and 52 EH/s.

With up to 2.2 GW of total power capacity when fully constructed, the combined company would have 15 facilities spread over the US, Canada, Paraguay, and Argentina. Long-term growth would depend on this regional variety, allowing for ongoing expansion into favorable energy settings.

Riot’s Financial Strength and Future Prospects

With 8,872 Bitcoin as of April 30, 2024, little corporate debt, and over $700 million in cash, Riot’s solid financial profile would be very beneficial to Bitfarms. These are about ten times more resources than Bitfarms now has, which enables Riot to completely fund Bitfarms’ expansion ambitions.

Riot’s strong financial position, which also would enable it to access public share markets, would increase Bitfarms’ development potential.

Following the CEO of Bitfarms’ sudden resignation and the associated accusations, Riot’s CEO Jason Les and Executive Chairman Benjamin Yi have voiced worries about the company’s governance problems.

They stress how these matters must be addressed at a Special Meeting to guarantee the board works in the best interests of all shareholders.

Meanwhile, Norway intends to control data centers in order to stop mining cryptocurrencies that are hazardous to the environment, according to an ETHNews report.

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Syofri
Syofri
Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628
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