Bitcoin mining firm Core Scientific has reportedly turned down a $1bn acquisition proposal from AI firm CoreWeave, which is backed by substantial venture capital.
This move was made shortly after the two companies signed a new partnership agreement that was expected to generate a lot of revenue.
Core Scientific Rejects $1B Acquisition Offer
Core Scientific, a cryptocurrency mining company, rejected an unsolicited acquisition offer from CoreWeave, an artificial intelligence firm. The offer, valued at $5.75 per share, was made public earlier this week but needed to be deemed insufficient by Core Scientific’s board.
Core Scientific $CORZ rejected an unsolicited proposal from CoreWeave
➖Core Scientific received an unsolicited bid from CoreWeave on June 3, 2024, to acquire the company for $5.75 per share in cash.
➖Core Scientific’s board rejected the proposal as it undervalued the company… pic.twitter.com/UE8E8kR1cj
— InsideArbitrage (@InsideArbitrage) June 6, 2024
Subsequently, the firm recently issued a statement claiming that the proposal “substantially undervalues the company and is not in the best interest of the company and its shareholders.”
The rejection comes after the two companies signed a deal to improve CoreWeave’s high-performance computing capabilities that are estimated to produce around $3. 5 billion in revenue.
Partnerships and Market Impact
However, the partnership between Core Scientific and CoreWeave is still there with recently signed 12-year contracts. Based on these agreements, Core Scientific is expected to offer around 200 megawatts of capacity to CoreWeave thus increasing the company’s capacity in AI applications. After the announcement of these deals, the stock of Core Scientific jumped 40% earlier this week which is an indication of the market’s confidence in the strategic partnership.
This financial strategy is made at a time when the AI and cryptocurrency industries are rapidly developing and changing. Moreover, as reported by Coingape, yesterday, Nvidia, as a result of its AI technology managed to surpass Apple to become the second most valued public company in the US. Core Scientific has a major advantage in terms of infrastructure for high-performance computing, and that speaks a lot about the potential of the company which is not limited to the mining of cryptocurrencies.
The refusal of the company to accept the takeover bid could be as a result of the company preparing to position itself about the value and operations in the competitive market. Concurrently, Core Scientific’s stock remained stable at around $7.74 in pre-market trading despite the takeover offer, a 7.55% surge in the last day.
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