Key Points
- Riot Platforms is looking to acquire Bitfarms, with support from JPMorgan, to create the world’s largest public Bitcoin mining center.
- The proposed acquisition, valued at approximately $950 million, is considered strategically and financially sound by JPMorgan analysts.
Riot Platforms Eyes Bitfarms Acquisition
Riot Platforms, with the backing of JPMorgan, an American multinational financial services company, is proposing to acquire Bitfarms.
The aim is to create the world’s largest publicly traded Bitcoin (BTC) mining center.
Riot made its acquisition intentions known on Tuesday, offering to buy all outstanding BITF shares at $2.30 per share.
This offer, representing a 24% premium on the company’s one-month volume-weighted average price as of May 24, values the equity at approximately $950 million.
Analysts Support the Move
A report on Wednesday revealed that JPMorgan analysts believe the offer to be strategically and financially sound.
The analysts are of the view that the deal “makes a lot of sense” if accepted.
Riot previously tried to acquire Bitfarms privately, but Bitfarms’ board rejected the offer last month.
Despite the rejection, Riot went on to acquire a 9.25% stake in Bitfarms, becoming one of its largest shareholders.
Riot is planning to call a special shareholder meeting to discuss its proposal, which it believes would benefit both companies.
At the meeting, the company aims to discuss appointing a new independent director to Bitfarms’ board.
Riot’s CEO, Jason Les, expressed concerns about the Bitfarms Board’s commitment to acting in the best interests of all shareholders.
He believes the initial rejection of the acquisition proposal stemmed from some directors at Bitfarms not representing the full interests of shareholders.
As the industry awaits the outcome of the proposed acquisition, Riot’s executive chairman, Benjamin Yi, said the acquisition will be beneficial for both companies.
He believes that merging with Bitfarms would enable them to pool resources and create the largest Bitcoin mining firm in the world.
The acquisition would establish a vertically integrated Bitcoin mining company with up to 1.5 GW of power capacity and 52 EH/s self-mining capacity by the year’s end.
The combined company would operate 15 facilities across the United States, Canada, Paraguay, and Argentina, ensuring geographic diversification and benefiting from favorable energy arrangements.
