Bitcoin miner Bitfarms said it has entered into a merger agreement to acquire Stronghold Digital Mining for $125 million in equity value, alongside $50 million in assumed debt.

In a joint Aug. 21 statement, both companies revealed that their Boards of Directors unanimously approved the transaction. The deal—subject to regulatory approval and other conditions—is expected to close in the first quarter of 2025.

As part of the acquisition, Stronghold shareholders will receive 2.52 shares of Bitfarms for each Stronghold share they hold. Following the merger, Stronghold shareholders are projected to own less than 10% of the combined entity.

Expansion potentials

The merger could boost Bitfarms’ capacity to 307 MW, advancing its goal of reaching 950 MW by the end of 2025. This development comes as Bitfarms continues to explore expanding its capacity to support high-performance computing (HPC) and AI ventures in addition to its Bitcoin mining operations.

Bitfarms CEO Ben Gagnon revealed that the merger followed three years of negotiations and stated that the deal would secure a strong future for the miner’s operations. He said:

“With this transaction, we anticipate expanding and rebalancing our energy portfolio to 950 MW, with nearly 50% located in the U.S. by the end of 2025. We also see potential for multi-year expansion up to 1.6 GW, with approximately 66% in the U.S., up from about 6% today.”

Riot Platforms’ takeover efforts

This acquisition occurs against Riot Platforms‘ hostile takeover attempt on Bitfarms.

Last week, Riot revealed that it had raised its stake in Bitfarms to 85.3 million shares. This means the third largest Bitcoin miner on Wall Street owns 18.9% of the Canadian mining company, adding a new dimension to its ongoing efforts to exert pressure on Bitfarms’ management after a failed $950 million takeover bid in April.

Since then, Riot has adopted an approach that resulted in significant boardroom changes for Bitfarms, including the sudden exit of co-founder Nicolas Bonta and the appointment of Gagnon as the firm’s CEO.

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Liam ‘Akiba’ Wright

Senior Editor at CryptoSlate

Also known as “Akiba,” Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.

Bitfarms said its Bitcoin production and holdings increased last month despite the rising mining difficulty, according to an Aug. 31 statement.

The crypto miner revealed a 33.8% rise in Bitcoin production for July, attributed to a higher hashrate. Bitfarms mined 254 BTC in July, up from 189 BTC in the previous month. The firm also grew its hashrate to 11.1 EH/s by the end of July from 10.4 EH/s.

Bitfarms CEO Ben Gagnon said:

“Since the halving event in April, our Bitcoin mined per month has increased 62%. This speaks volumes to our operational expertise and improved efficiency, and I am confident that we are well-positioned to further accelerate our growth and drive value for shareholders.”

Gagnon furthered that the miner’s largest site, measured by MWs and hashrate in Paso Pe, Paraguay, is now fully operational.

Challenges faced in July

Despite the progress, Bitfarms faced an 8.4% increase in mining difficulty last month and navigated challenges related to Riot Platforms’ hostile takeover attempt.

Gagnon explained that the firm’s hashrate remains below the 12 EH/s target due to the underperformance of around 3000 T21 Bitmain miners, which “experienced overheating issues even at lower temperatures.”

He added:

“Bitmain is rapidly replacing these machines at their expense. The new miners are expected to arrive and be installed on site in three weeks. We have worked closely with Bitmain to resolve these manufacturing issues and to prevent a re-occurrence in future batches, including August deliveries.”

BTC holding rise

Bitfarms stated that its improved Bitcoin production helped to increase its treasury of the flagship digital asset.

The company sold 142 of the 253 BTC mined in July for $8.6 million in total as part of its regular Treasury management. The remaining 111 BTC were added to its Treasury, boosting its total holdings to 1,016 BTC, valued at approximately $67.2 million as of July 31.

Bitfarms’ CFO Jeff Lucas noted that the company’s continued growth supports its goal of achieving a mining capacity of 21 EH/s and 21 w/TH by year-end. He said:

“Being fully funded reduces our near-term capex requirements and allows us to apply a greater amount of excess cash flow from operations to building our HODL.”

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Assad Jafri

Editor & Reporter at CryptoSlate

AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

Bitfarms has introduced a new shareholder rights plan — a so-called poison pill strategy — to thwart Riot Platforms’ takeover attempt, according to a July 24 statement.

The miner intends to issue new shares to dilute stakes if any entity, including Riot Platforms, acquires over 20% of its shares within the next six months. The move still requires shareholder ratification and approval from the Toronto Stock Exchange.

The firm’s board of directors unanimously approved the plan on July 24, after the Ontario Capital Markets Tribunal ordered the firm to end its initial poison pill strategy, which was implemented in June.

In June, Bitfarms adopted a poison pill strategy that would lead to the issuance of new shares if an entity acquired more than 15% of its shares.

However, Riot — which has purchased 14.9% of Bitfarms’ shares — challenged the poison pill plan at the Ontario tribunal and won a ruling in its favor.

Riot CEO Jason Les welcomed the decision, saying:

“The adoption of the off-market Poison Pill is yet another example of the broken corporate governance that plagues Bitfarms and of the ongoing attempts by the Bitfarms directors to entrench themselves. We appreciate that the Tribunal acted quickly and decisively to remove the Poison Pill.”

Riot has also called a shareholder meeting to remove Bitfarms’ founder from the board.

Shareholders protection

According to Bitfarms, the new shareholder rights plan aims to ensure fair treatment of shareholders in any future acquisition attempts. The firm added that the plan also protects against “creeping bids” — a situation where an entity accumulates a significant stake in its shares without a formal takeover bid.

Bitfarms further emphasized that the new plan is not a reaction to any specific acquisition proposal but seeks to ensure fair and equal treatment for all shareholders.

The development marks the latest in the ongoing takeover drama between Riot and Bitfarms. In May, Bitfarms rejected Riot’s $950 million acquisition bid and has since bolstered its board with the appointment of Fanny Philip and the elevation of Ben Gagnon to the CEO position.

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Editor Editor

Assad Jafri

Editor & Reporter at CryptoSlate

AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

Bitcoin miner Bitfarms will hold a shareholder vote in October regarding Riot Platform’s takeover bid, according to a July 12 statement.

The miner stated that its shareholders of record as of Sept. 26, 2024, will be able to vote at the special meeting it convened at Riot’s behest.

Takeover bid

This marks the latest development in the protracted takeover battle between Riot and Bitfarms.

In April, Riot attempted to acquire Bitfarms for approximately $950 million. However, Bitfarms rejected the unsolicited offer and said it significantly undervalued the firm.

Since then, Riot has stepped up efforts, creating a dedicated website to educate Bitfarms’ shareholders and calling for a special meeting that will restructure the rival miner board by removing Chairman Nicolas Bonta and Director Andrés Finkielsztain.

Riot claimed these moves are necessary as the current board prioritizes the directors’ interests over those of shareholders.

Bitfarms, however, argued that Riot’s meeting request is part of its efforts to “opportunistically acquire” it after its botched $950 million offering in April. The miner stated that Riot’s request would disrupt its strategic alternatives review process and evaluation opportunities to maximize shareholder value.

Furthermore, Bitfarms pointed out that Riot had requested the shareholding record date be set after a hearing with the Ontario Securities Commission on July 22 and 23. It added that Riot made this request to nullify its shareholder rights plan and increase its holdings in the rival company. Riot is Bitfarms’ largest shareholder, holding a 14.9% stake in the miner.

Despite this, Bitfarms proceeded with its decision after a special committee of independent board directors, with financial and legal advisors, decided on the meeting and record date.

Moreover, Bitfarms urged Riot to engage it constructively to avoid depleting its limited cash resources and protect stakeholders’ interests.

Bitfarms recently appointed Ben Gagnon as CEO and Fanny Philip as an independent board member.

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Bitcoin miner Riot Platforms’ effort to take over rival Bitfarms has taken a new turn with recent developments in both companies.

Dedicated website

On July 8, Riot launched a dedicated website, “ABetterBitfarms,” to educate Bitfarms shareholders on why the rival firm’s board should be reconstituted.

CryptoSlate’s visit to the new website was greeted by a bold message stating:

“It’s Time To Fix Bitfarms’ Broken Corporate Governance. New, independent perspectives are needed on the Bitfarms Board to evaluate the best path forward for shareholders.”

The site urges Bitfarms stakeholders to anonymously share their views on the company’s operations and encourages shareholders to register and follow the website.

The move adds to the ongoing conflict between the two BTC miners. Riot first tried to acquire Bitfarms in April for about $950 million, but Bitfarms rejected the offer because it undervalued the company.

In June, Riot called for a special meeting of Bitfarms shareholders to restructure Bitfarms’ board. The miner wants to remove Chairman and Interim CEO Nicolas Bonta and director Andrés Finkielsztain, claiming the current board prioritizes the directors’ interests over those of shareholders.

Meanwhile, Riot has steadily purchased Bitfarms stock, becoming its largest shareholder with a 14.9% stake.

New CEO

On the other hand, Bitfarms continues to resist Riot’s takeover and has appointed Ben Gagnon, the former Chief Mining Officer, as its Chief Executive Officer.

Gagnon started at the firm as its Director of Business Development in 2019 and oversaw its mining strategy and operations, including growth strategies, mining economics, miner portfolio management, and evaluation and integration of new technologies.

Gagnon stated that the firm would focus on HPC (high-performance computing) for AI (artificial intelligence) opportunities under his stewardship and prepare strategies for the 2028 halving event.

Meanwhile, Gagnon is the second major executive hire for the firm in the last two weeks. Bitfarms also appointed Fanny Philip as an independent board member, increasing the board to five directors, four of whom are independent.

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Bitcoin miner Bitfarms reported an increase in Bitcoin production for June following an overall capacity upgrade.

According to its latest monthly production report, Bitfarms’s BTC production rose 21% month-on-month to 189 BTC in June, up from the 156 BTC it produced in May.

The miner stated that its production was impacted by the curtailment in Argentina and the downtime associated with upgrading its miners in Quebec. However, this was partially offset by a 0.8% decrease in network difficulty compared to May.

Meanwhile, the company sold 71% of the 189 BTC it produced, netting $8.8 million as part of its regular Treasury management process. Despite this, Bitfarms’ Treasury holds 905 BTC, valued at $55.2 million, with 1,557 BTC produced year-to-date.

Hashrate growth

The company revealed that it enhanced hashrate by 39% to 10.4 EH/s as of the end of the month. Ben Gagnon, Bitfarms’ Chief Mining Officer, said the firm had upgraded its factories to expand hashrate and improve energy efficiency.

Consequently, the miner increased its installed hashrate to 11.4 EH/s, with 10 EH/s operational. The miner also enhanced its energy efficiency to 25 w/TH, achieving a 7.4% month-on-month and 36% year-on-year growth.

Further, he reported that the company replaced 39,000 miners with new ones in June. Gagnon stated:

“We continue to make progress on our fleet upgrades and new facility constructions, having installed over 39,000 new miners and deracked over 39,000 old miners so far this year.”

Additionally, Bitfarms highlighted its strategic US expansion deal, which saw it secure a 120 MW site for High Performance Computing (HPC) and Artificial Intelligence (AI) in Sharon, Pennsylvania.

Takeover attempt continues

The takeover battle between Bitfarms and its competitor, Riot Platforms, continued to evolve in June.

Riot, which holds about 15% of Bitfarms, had called for a special shareholder meeting where it wanted to nominate three independent directors to Bitfarms’ board as part of its takeover strategy.

In response, Bitfarms named Fanny Philip as an independent board member, revealing that this appointment increased its board to five directors, four of whom are independent.

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