09:22 AM EDT, 05/28/2024 (MT Newswires) -- Riot Platforms Inc. said Tuesday that it has offered to buy all of the outstanding shares of Bitfarms ( BITF ) at US$2.30 per Bitfarms ( BITF ) common share.

The cash-and-stock proposal represents about US$950 million in total equity value. Also, Riot has become Bitfarms' ( BITF ) largest shareholder by buying a 9.25% stake in Bitfarms ( BITF ).

The transaction is expected to create a vertically integrated Bitcoin mining company with about 1 gigawatt of current power capacity and 19.6 EH/s of current self-mining capacity, with up to 1.5 GW of power capacity and 52 EH/s of self-mining capacity by year-end.

Riot's board has approved the proposal. As a result of the proposal, Bitfarms' ( BITF ) shareholders would own up to about 17% of the combined company, Riot said.

Meanwhile, Riot CEO Jason Les voiced concern that the founders on the Bitfarms ( BITF ) board - Nicolas Bonta and Emiliano Grodzki - may not be acting in the best interests of all Bitfarms ( BITF ) shareholders.

"The abrupt termination of the Bitfarms ( BITF ) CEO without a transition plan in place at a critical period of execution for Bitfarms ( BITF ) and the industry, as well as the allegations, if accurate, regarding the actions of certain members of the Bitfarms Board set out in the lawsuit filed by that recently terminated CEO, raise serious governance questions," the executive added.

Bitfarms ( BITF ) board has previously rejected the proposal. Riot said it submitted the proposal to the board of Bitfarms ( BITF ) on April 22.

Riot intends to call a special meeting of Bitfarms' ( BITF ) shareholders to add new independent directors to the board of Bitfarms ( BITF ). The special meeting is expected to be called after Bitfarms' ( BITF ) annual general and special meeting on May 31.

Bitfarms' ( BITF ) shares, which rose over 3% in Canada yesterday, surged 11.4% in premarket US trading on Tuesday.