Bitfarms CEO dispute prompts Riot Platforms’ $950M proposal for buyout

Bitcoin mining company Riot Platforms has made an offer to acquire Bitfarms at a premium price. The offer was made to Bitfarms’ board on April 22 but was rejected. Riot, which already holds a 9.25% stake in Bitfarms, has proposed a combined cash and common stock offer that would value the company at approximately $950 million, representing a 24% premium over Bitfarms’ one-month average share price. If the deal goes through, Bitfarms shareholders would own around 17% of the merged company. Riot stated that the acquisition would provide Bitfarms’ shareholders with the potential for future value creation and a stronger company led by an experienced management team. Bitfarms is currently looking for a new CEO, and its former CEO has filed a lawsuit against the company for breach of contract. Riot plans to requisition a special shareholders meeting to add new independent directors to Bitfarms’ board. In 2023, Bitfarms reported disappointing earnings due to a costly technical upgrade ahead of the Bitcoin halving. Analysts expected better performance after the halving, but Bitfarms’ April earnings dropped by 29% compared to the previous year. Meanwhile, Riot saw a significant increase in net income in the first quarter of 2024. A merger between the two companies would create the largest publicly listed Bitcoin miner with significant power and mining capacities. Bitfarms has not yet commented on the offer.