Bitfarms Calls Riot’s Takeover Offer ‘Significantly’ Undervalued
Canada-based Bitfarms has responded to the takeover offer from its bitcoin mining rival Riot Platforms (NASDAQ: RIOT), saying it “significantly undervalues” Bitfarms and its growth prospects.
Riot revealed the proposal on Tuesday, intending to purchase 100% of the common shares of Bitfarms for $2.30 per share after becoming Bitfarms’ largest shareholder with a 10% stake. Bitfarms responded on Wednesday that it first received the “unsolicited” proposal from Riot on April 22 with the same price offer but decided that was a significant undervaluation.
“A Special Committee of the Board comprised solely of independent directors carefully considered the [April 22] proposal and determined it significantly undervalues the Company and its growth prospects,” Bitfarms said in the response on Wednesday.
The firm added that it requested customary confidentiality and non-solicitation protections to engage with Riot in “a meaningful manner” but did not receive a response. Such requests would create an exclusive and confidential negotiating environment.
The stock price of Bitfarms (BITF) closed at $2.05 on April 22 before declining to $1.60 in early May. It has since bounced back to over $2.00 on May 24. Following the publication of Riot’s takeover plan, BITF jumped 9.41% on Tuesday and closed at $2.21. Yet still, it is down 22% year-to-date, underperforming bitcoin and other major competitors.
Bitfarms said the special committee is evaluating strategic alternatives such as continuing to execute its business plan, a strategic business combination, or a sale of the company.
The company previously announced hardware and infrastructure expansion plans to reach 21 EH/s by the end of 2024 at a fleet efficiency of 21 J/TH. Bitfarms said in the response that it “strongly believes” that the continued execution of the growth plan maximizes shareholder value.
