Riot Platforms Plans To Acquire Bitfarms Despite Rejection

According to CryptoPotato, Riot Platforms Inc., a prominent crypto mining firm, has expressed its intention to acquire Bitfarms Ltd., another key player in the Bitcoin mining sector. Riot has already secured a 9.25% stake in Bitfarms and intends to make a public takeover offer, despite the recent rejection by the company’s board. Riot has proposed an acquisition price of $2.30 per share in cash and stock, which values Bitfarms at approximately $950 million in equity. Riot’s Executive Chairman, Benjamin Yi, highlighted the strategic significance of this merger, stating that the combination of Bitfarms and Riot would create the largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term growth. According to Riot, the proposed deal would result in the world’s largest Bitcoin miner, with a combined power capacity of 1 gigawatt (GW) and a mining capacity of 19.6 exahashes per second (EH/s). By the end of the year, the capacity is projected to reach 1.5 GW and 52 EH/s. The deal would also offer strategic and financial benefits, including enhanced growth potential and better access to equity markets. The new entity would operate 15 facilities across the US, Canada, Paraguay, and Argentina. Riot’s strong financial standing, with minimal debt, over $700 million in cash, and 8,872 Bitcoin, is a key factor in the proposed acquisition. Riot expects this will support Bitfarms’ growth and offer better access to equity markets. Riot submitted its offer to Bitfarms’ board on April 22, but the latter turned it down without engaging in “substantive dialogue.” According to the terms, Bitfarms shareholders would hold approximately 17% of the merged company. Riot also intends to call for a special shareholder meeting to discuss the appointment of new independent directors following Bitfarms’ annual meeting on May 31. The proposed acquisition comes at a critical time for the Bitcoin mining industry, which is experiencing rapid consolidation following the halving. The event, which halves the rewards for mining Bitcoin, poses revenue challenges for miners and has caused larger companies to seek mergers and acquisitions to enhance their competitive edge. While larger miners like Riot have thrived post-halving with substantial cash reserves, smaller miners struggle due to limited negotiating power and capital access. Riot operates North America’s largest Bitcoin mining facility in Texas, with a 700 MW capacity and plans for a new 1 GW site. Despite powering 200,000 Texas homes, mining operations face risks from Texas’ extreme weather and rising energy prices. Meanwhile, Bitfarms has been expanding its operations globally, particularly in South America, where electricity costs are lower.