Riot Platforms has proposed to acquire Bitfarms for approximately $950 million, a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24.

Riot's announcement followed Bitfarms' Board of Directors' rejection of a private proposal without substantial engagement. The initial private offer was made on April 22, during a period of internal issues at Bitfarms, including a CEO dispute and lawsuit.

Riot aims to create the world's largest publicly listed Bitcoin miner by combining its financial resources and strategic vision with Bitfarms’ operations. Riot's Executive Chairman Benjamin Yi highlighted the potential for significant growth and geographic diversification from the merger.

Already holding a 9.25% stake in Bitfarms, Riot offers a mix of cash and stock that would give Bitfarms' shareholders about 17% of the combined entity. The merger would result in a Bitcoin mining powerhouse with about 1 GW of current power capacity and 19.6 EH/s of self-mining capacity, potentially rising to 1.5 GW and 52 EH/s by the end of the year.

Citi is advising Riot financially, with legal advice from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Davies Ward Phillips & Vineberg LLP. Bitfarms has yet to respond publicly to Riot's proposal.

The takeover bid coincides with Bitfarms’ internal turmoil, including the firing of former CEO Geoffrey Morphy, who has filed a $27 million lawsuit for wrongful dismissal. Bitfarms co-founder and Chairman Nicolas Bonta was appointed interim CEO following Morphy's dismissal. The company has dismissed Morphy’s claims as baseless and plans to defend itself.

Morphy's abrupt departure and subsequent legal battle have raised governance concerns within Bitfarms. Riot executives, including CEO Jason Les, expressed worries about the governance practices and actions of Bitfarms' co-founders Bonta and Emiliano Grodzki.

Riot plans to call a special shareholders meeting after Bitfarms' Annual General and Special Meeting on May 31, 2024, to propose new independent directors for Bitfarms' Board.