— Riot Platforms’ (NASDAQ:) proposed takeover of rival Bitfarms (NASDAQ:) “makes a lot of sense” for the crypto miner “strategically and financially,” analysts at JPMorgan have said.

On Tuesday, Riot Platforms announced that it had offered $2.30 per Bitfarms share in cash and Riot stock, translating to an equity value of roughly $950 million. Bitfarms rejected the bid, Riot Chief Executive Officer Jason Les said.

Riot also revealed that it had taken a 9.25% stake in Bitfarms, becoming the firm’s biggest shareholder. It added that it intends to call for a special shareholder meeting to discuss bringing on a new independent director to Bitfarms’ board.

Nasdaq-listed shares in Bitfarms, which, analysts have noted, faces uncertainty around its leadership team, surged by 9.4% on Tuesday. The stock has slumped by more than a fifth so far this year.

In a note to clients, the JPMorgan analysts argued that the transaction would add “significant scale” for Riot, with the combined entity having greater power and mining capacity. They said Riot would also be acquiring Bitfarms at a discount to its current valuation and “would still have more than $700 million cash and $600 million in to fund expansion and hardware upgrades.”

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