Riot Platforms Rejects $950 Million Bitfarms Acquisition Proposal

Colorado-based Riot Platforms has disclosed a proposal it made to acquire fellow Bitcoin mining company, Toronto-based Bitfarms, for $950 million USD. The proposed acquisition would combine two of the largest publicly traded Bitcoin mining companies in North America, creating a major player in the industry.

Riot Platforms is one of the largest Bitcoin mining companies in the world, with a hashrate of approximately 5.6 exahashes per second (EH/s). Bitfarms is also a major Bitcoin mining company, with a hashrate of approximately 3.8 EH/s.

The proposed acquisition would give Riot Platforms a significant increase in its hashrate and operations, and would further consolidate the Bitcoin mining industry. The combined company would have a hashrate of approximately 9.4 EH/s, making it one of the largest Bitcoin mining companies in the world.

In a statement today, Riot Platforms proposed to acquire all outstanding shares of Toronto-based Bitfarms for $2.30 USD per common share, which it said in a statement represents a 24 percent premium to Bitfarms' share price on May 24.This offer values Bitfarms at approximately $950 million USD. Riot Platforms said that the acquisition would allow it to increase its hashrate and operations, and would further consolidate the Bitcoin mining industry.

In its statement today, Riot Platforms expressed concerns about the recent actions of Bitfarms' founders as well as allegations made in a lawsuit filed by Bitfarms' recently ousted CEO.Riot Platforms said that it had submitted a proposal to acquire Bitfarms on April 22, but that the proposal was rejected by Bitfarms. Riot Platforms said that it is "concerned about the recent actions of Bitfarms' founders, including the abrupt termination of the CEO and the allegations made in the lawsuit filed by the former CEO."

Riot Platforms reiterated its proposal to acquire Bitfarms today and said it plans to hold a special meeting aimed at bringing "needed change" to Bitfarms' board.

Riot Platforms said that it believes that the current Bitfarms board is not acting in the best interests of the company and its shareholders. Riot Platforms said that it plans to nominate a slate of directors at the special meeting who it believes will be able to provide the necessary leadership and oversight to Bitfarms.Founded in 2017, Bitfarms owns and operates Bitcoin mining farms and provides computing power to cryptocurrency networks. The company trades on the Toronto Stock Exchange and Nasdaq under the symbol "BITF."

On May 11, Morphy reportedly filed a $27-million lawsuit against Bitfarms in the Superior Court of Ontario, claiming breach of contract, wrongful dismissal, and aggravated and punitive damages.

In his lawsuit, Morphy alleges that Bitfarms breached his employment contract by terminating him without cause and without providing him with reasonable notice. Morphy also alleges that Bitfarms wrongfully dismissed him in retaliation for his whistleblowing activities.On May 13, Bitfarms announced that Morphy had been terminated effective immediately, and co-founder and chairman Nicolas Bonta would serve as interim president and CEO.

Riot Platforms initially delivered its takeover proposal to Bitfarms privately on April 22. However, Bitfarms' board rejected the proposal "without engaging in substantive dialogue," according to Riot.Riot said that the quick rejection, as well as allegations raised in Morphy's lawsuit, compelled it to disclose its proposal to shareholders.Riot said today that it has accumulated a 9.25 percent equity stake in Bitfarms, claiming to be the largest shareholder in the company.