Bitcoin mining firm Bitfarms rejected a nearly $1 billion acquisition proposal from Riot Platforms, another bitcoin mining company.

Riot wanted to buy out all of Bitfarms' outstanding shares at $2.30 a piece — a 24% premium on the one-month weighted average per share, according to a Riot Platforms release. The deal would have cost $950 million in total equity value.

Riot sought the deal as a way to create one of the largest publicly listed Bitcoin mining firms with broad geographic operations, Riot Executive Chairman Benjamin Yi said in the release. However, Bitfarms' board of directors did not take the deal.

"We were disappointed to learn that the Bitfarms Board rejected our compelling proposal without engaging in substantive dialogue with us," Yi added. "While we have long respected Bitfarms’ business and management team, we are confident that Bitfarms’ shareholders will agree that this proposal represents a significantly more attractive alternative for Bitfarms than its standalone trajectory."

However, Riot noted it has since purchased a 9.25% stake in Bitfarms, making Riot the largest shareholder in the firm.

Following Bitfarms’ Annual General and Special Meeting, scheduled for May 31, Riot intends to requisition a special meeting of Bitfarms’ shareholders to add new and independent directors to the Bitfarms board.

Shares of Bitfarms were trading up 10% to $2.22 at publication time, according to Yahoo Finance, while Riot's stock traded up 3.8% to $10.77 per share.

Bitfarms fired CEO 

Commenting on the rejected proposal, Riot CEO Jason Les noted that Bitfarms' recent chief executive change played a part in the acquisition proposal.

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"We are deeply concerned that the founders on the Bitfarms Board – Nicolas Bonta and Emiliano Grodzki – may not be acting in the best interests of all Bitfarms shareholders," Les said in the statement. "The abrupt termination of the Bitfarms CEO without a transition plan in place at a critical period of execution for Bitfarms 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."

Les added, "This is why we intend to call a special meeting to give shareholders a chance to bring needed change to the Bitfarms Board and make repairing Bitfarms’ broken corporate governance and maximizing value for all Bitfarms’ shareholders their top priorities."

Bitfarms let go of its former CEO Geoffrey Morphy on May 13, after Morphy filed a $27 million suit against the firm for alleged breach of contract, wrongful dismissal and aggravated and punitive damages, The Block previously reported. Morphy previously served as the firm's president and COO.

Bitwise Senior Crypto Research Analyst Juan Leon noted that combining two firms' operations would result in "52 EH/s of self-mining capacity by year-end 2024 across 15 sites globally," making the conglomerate the largest bitcoin mining firm. Bitfarms rejecting Riot's deal, however, could potentially bode well for its stakeholders.

"The Bitfarms board is now dealing with the poorly planned ouster of the CEO and a hostile takeover," Leon said. "Additional bids could result in a higher takeover price, benefitting shareholders."

Riot Platforms had no further comment beyond its published company statement. The Block reached out to Bitfarms.