Riot Platforms Makes Bold Bid to Acquire Bitfarms

As an analyst with extensive experience in the Bitcoin mining industry, I am excited about Riot Platforms Inc.’s (RIOT) ambitious proposal to acquire all outstanding shares of Bitfarms Ltd. (BITF). If successful, this merger would create the world’s largest publicly listed Bitcoin mining company, a significant milestone for the industry.

Riot Platforms Inc. (RIOT) stunned the Bitcoin mining sector by announcing plans to buy all available Bitfarms Ltd. (BITF) shares. If accomplished, this bold action would result in the formation of the biggest publicly traded Bitcoin mining business globally.

As an analyst, I would express it this way: The proposed offer values each Bitfarms share at US $2.30, which is a significant 24% above the average price from May 24th. This equates to an impressive total equity value of approximately US$950 million.

— Riot Platforms, Inc. (@RiotPlatforms) May 28, 2024

As an analyst, I would describe the proposal in this manner: In the proposed transaction, I, along with other Bitfarms owners, will receive both cash and Riot common stocks. The ownership stake of Riot Platforms, our current largest shareholder, is currently at 9.25%. With this deal, their proportion could potentially increase up to approximately 17% of the combined business.

Under this cash and stock proposition, Bitfarms’ shareholders stand to gain a substantial bonus and instant monetary benefits. Additionally, they will secure the chance to be part of a financially robust and commercially successful enterprise with a clear-cut strategy and a capable leadership team that boasts a proven track record.

As a crypto investor, I’ve noticed some intriguing developments between Bitfarms and Riot. Initially, Bitfarms apparently declined Riot’s offer in April without extensive discussions. However, I’m concerned about the actions of Bitfarms’ board and believe they may not be acting in the best interest of their shareholders. In response, Riot has announced plans to convene a special shareholder meeting where they intend to propose new board members.

As an analyst, I can tell you that the merger between Riot and Bitfarms presents substantial advantages from my perspective. The resulting entity would possess a formidable mining capacity of 19.6 EH/s at present, with predictions pointing towards a breathtaking expansion up to 52 EH/s by the end of the year. Furthermore, I believe that Riot’s strong financial position will significantly contribute to Bitfarms’ growth strategy.

As a researcher, I’d put it this way: Riot Games’ strong financial position is expected to significantly contribute to Bitfarms’ expansion strategies.

The merger brings about more than just an enhancement of current capabilities. It establishes a mining network that spans diverse geographical locations. Once completed, the merged company will operate in 15 facilities situated in the US, Canada, Paraguay, and Argentina. This global reach translates to a substantial power capacity of 2.2 GW at full development. The resulting diversification offers numerous advantages, including the ability to expand into regions with favorable energy deals, securing sustainable growth prospects for the long term.

Bitfarms can significantly gain from Riot’s financial might. Riot boasts a robust financial position with very little corporate debt. They possess over $700 million in cash and an impressive Bitcoin hoard of more than 8,872 units as of April 30, 2024 – figures that are ten times greater than Bitfarms’ current reserves.

Due to its robust financial position, Riot can entirely fund Bitfarms’ upcoming expansion strategies. Moreover, Riot is confident that the combined entity’s financial standing will grant Bitfarms increased exposure to public investment opportunities, much like the benefits Riot currently experiences.

I, Benjamin Yi, Executive Chairman of Riot, believe that merging Riot with Bitfarms would result in the leading publicly traded Bitcoin mining company worldwide. Our operations, which are geographically diverse, would provide a solid foundation for long-term expansion. Regrettably, we were dismayed when the Bitfarms Board dismissed our proposal without holding meaningful discussions with us. Despite our admiration for Bitfarms’ business and management team, we are convinced that our proposal presents a more enticing proposition for Bitfarms’ shareholders than their current course of action.

The Board of Directors at Riot has unanimously given their approval for the proposed acquisition of Bitfarms. This proposal, however, is not legally binding and is contingent upon usual conditions being met (such as signing a definitive agreement). Unlike typical deals, this transaction would not hinge on Riot securing financing and would not necessitate a vote from its shareholders. Nevertheless, the completion of any deal between Riot and Bitfarms is not guaranteed.

For shareholders of Bitfarms, this deal presents an attractive proposition. They’d be entitled to a higher price for their shares and the opportunity to join a major player in the Bitcoin mining industry. However, the plan isn’t without hurdles. The board’s rejection and potential internal governance complications within Bitfarms could pose significant obstacles.

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2024-05-28 18:46