Bitfarms Responds to Unsolicited Proposal from Riot Platforms
Bitfarms has received an unsolicited proposal from Riot Platforms to acquire 100% of its common shares at $2.30 per share. However, Bitfarms' Special Committee found the offer significantly undervalues the company. The committee, comprising independent directors, has initiated a strategic alternatives review to ensure maximum shareholder value. This review includes potential business combinations, strategic transactions, or continuing with Bitfarms' current business plan.
Bitfarms has also received other unsolicited expressions of interest and is engaging with multiple parties under customary Non-Disclosure Agreements. The company's CEO search remains on track, and Bitfarms is progressing towards its 2024 guidance of 21 EH/s and 21 w/TH, representing a 223% hashrate increase and 40% efficiency improvement. Moelis & Company serves as the financial advisor, with Skadden, Arps, Slate, Meagher & Flom LLP, Peterson McVicar LLP, and McMillan LLP serving as legal advisors.
- Bitfarms received multiple unsolicited expressions of interest, indicating strong market interest.
- The Special Committee is conducting a strategic review to ensure maximum shareholder value.
- Bitfarms is progressing toward 2024 guidance of 21 EH/s and 21 w/TH, representing a 223% hashrate increase and 40% efficiency improvement.
- Efficiency gains and fleet upgrades are on track, potentially leading to the strongest growth in the company's history.
- The CEO search remains on track, showing organizational stability.
- Riot Platforms' offer of $2.30 per share was deemed to undervalue the company.
- Riot did not respond to requests for confidentiality and non-solicitation protections.
- The ongoing strategic review creates uncertainty around the company's direction.
- The need to evaluate multiple unsolicited proposals may divert management's focus from operational goals.
Insights
The proposal from Riot Platforms to acquire Bitfarms at
In financial terms, the rejection of this offer could signal to investors that Bitfarms expects substantial growth in its market valuation in the near future, thus aiming for a higher acquisition premium if the company decides to sell. Investors should note the ongoing strategic alternatives review, which includes possibilities such as a business combination or sale. These strategic moves can potentially drive the stock price upwards as they suggest proactive management to enhance shareholder value.
Bitfarms' guidance of reaching 21 EH/s and 21 W/TH by 2024 represents substantial technological advancements. EH/s (exahashes per second) is a measure of computational power used in Bitcoin mining and W/TH (watts per terahash) is a measure of energy efficiency. Achieving these targets would place Bitfarms at the top in terms of efficiency and growth among publicly-traded Bitcoin mining peers.
From a technical perspective, such progress implies significant improvements in mining hardware and operational efficiencies. For investors, these advancements can translate into higher profitability, reduced operating costs and stronger competitive positioning within the industry. However, it also involves risks related to technological upgrades and market volatility of Bitcoin, which needs to be cautiously monitored.
The rejection of Riot's acquisition proposal and the commencement of a strategic alternatives review suggest Bitfarms is exploring various avenues to maximize shareholder value. This includes potential strategic business combinations or even a sale, showcasing the company's commitment to exploring all possible options for growth and value creation.
For a retail investor, this signifies that while the share price may experience short-term fluctuations due to ongoing evaluations, the long-term outlook is likely positive given the company's proactive approach. The involvement of multiple interested parties indicates a strong market interest, which could drive up the stock price if a favorable deal is reached. Investors should stay attuned to updates on the strategic review process and any potential offers, as these could significantly impact the stock's trajectory.
Company Committed to Maximizing Value for All Shareholders; Strategic Alternatives Process Underway
Reaffirms Confidence in Business and Guidance of 21 EH/s and 21 w/TH in 2024
This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 8, 2024, to its short form base shelf prospectus dated November 10, 2023.
TORONTO, Ontario and BROSSARD, Québec, May 29, 2024 (GLOBE NEWSWIRE) -- Bitfarms Ltd. (Nasdaq/TSX: BITF) (“Bitfarms” or the “Company”), a global Bitcoin vertically integrated company, today confirms that the Company received a proposal by Riot Platforms, Inc. (“Riot”) on April 22, 2024 to acquire
Having received additional unsolicited expressions of interest, with each additional party executing a customary Non-Disclosure Agreement, the Special Committee is conducting a thorough strategic alternatives review to ensure it achieves maximum shareholder value. These alternatives could include, among others, continuing to execute on the Company’s business plan, a strategic business combination or other strategic transaction, or a sale of the Company.
As previously announced, the Company’s CEO search remains on track and the Company continues to execute the expansion and transformative fleet upgrade. Bitfarms has realized notable efficiency gains and is progressing toward 2024 guidance of 21 EH/s and 21 w/TH, representing a
Advisors
Moelis & Company LLC is serving as financial advisor to Bitfarms. Skadden, Arps, Slate, Meagher & Flom LLP, Peterson McVicar LLP and McMillan LLP are acting as legal advisors.
About Bitfarms Ltd.
Founded in 2017, Bitfarms is a global Bitcoin mining company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company’s proprietary data analytics system delivers best-in-class operational performance and uptime.
Bitfarms currently has 12 Bitcoin mining facilities and one under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure.
To learn more about Bitfarms’ events, developments, and online communities:
www.bitfarms.com
https://www.facebook.com/bitfarms/
https://twitter.com/Bitfarms_io
https://www.instagram.com/bitfarms/
https://www.linkedin.com/company/bitfarms/
Cautionary Statement
Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory authority accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. The statements and information in this release regarding the Riot Proposal, any negotiations in respect of the Riot proposal, the outcome of any transaction, the Company’s ongoing CEO search, growth opportunities and prospects for the Company, and other statements regarding future growth, plans and objectives of the Company are forward-looking information. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “prospects”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
This forward-looking information is based on assumptions and estimates of management of the Company at the time they were made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks relating to: the construction and operation of the Company’s facilities may not occur as currently planned, or at all; expansion may not materialize as currently anticipated, or at all; the power purchase agreements and economics thereof may not be as advantageous as expected; the digital currency market; the ability to successfully mine digital currency; revenue may not increase as currently anticipated, or at all; it may not be possible to profitably liquidate the current digital currency inventory, or at all; a decline in digital currency prices may have a significant negative impact on operations; an increase in network difficulty may have a significant negative impact on operations; the volatility of digital currency prices; the anticipated growth and sustainability of hydroelectricity for the purposes of cryptocurrency mining in the applicable jurisdictions; the inability to maintain reliable and economical sources of power for the Company to operate cryptocurrency mining assets; the risks of an increase in the Company’s electricity costs, cost of natural gas, changes in currency exchange rates, energy curtailment or regulatory changes in the energy regimes in the jurisdictions in which the Company operates and the potential adverse impact on the Company’s profitability; the ability to complete current and future financings; the impact of the Restatement on the price of the Company’s common shares, financial condition and results of operations; the risk that a material weakness in internal control over financial reporting could result in a misstatement of the Company’s financial position that may lead to a material misstatement of the annual or interim consolidated financial statements if not prevented or detected on a timely basis; historical prices of digital currencies and the ability to mine digital currencies that will be consistent with historical prices; and the adoption or expansion of any regulation or law that will prevent Bitfarms from operating its business, or make it more costly to do so. For further information concerning these and other risks and uncertainties, refer to the Company’s filings on www.sedarplus.ca (which are also available on the website of the U.S. Securities and Exchange Commission at www.sec.gov), including the MD&A for the year-ended December 31, 2023, filed on March 7, 2024 and the MD&A for three-month period ended March 31, 2024 filed on May 15, 2024. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those expressed in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended, including factors that are currently unknown to or deemed immaterial by the Company. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on any forward-looking information. The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.
Investor Relations Contact:
Tracy Krumme
SVP, Investor Relations
+1 786-671-5638
tkrumme@bitfarms.com
Media Contacts:
Actual Agency
Khushboo Chaudhary
+1 646-373-9946
mediarelations@bitfarms.com
Québec Media: Tact
Louis-Martin Leclerc
+1 418-693-2425
lmleclerc@tactconseil.ca
U.S. Media
Dan Katcher or Joseph Sala
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
FAQ
What was the offer made by Riot Platforms to acquire Bitfarms?
Why did Bitfarms reject Riot Platforms' offer?
What is Bitfarms' guidance for 2024?
What strategic alternatives is Bitfarms considering?
Who are the advisors for Bitfarms during this process?
