The stand-out from the company’s deal with HIVE Blockchain is the valuation it places on Argo shares
PLC () unveiled a strategic co-operation deal that values its shares well in excess of the current market price as it took aim at a proposal from an activist investor to place its own appointee to the board.
The latter first. Lynchwood Nominees, which holds Argo stock on behalf of colourful entrepreneur Frank Timis and his company First Investments, has put forward Jeff Couch as a potential new director ahead of a special shareholder meeting later this week.
The crypto miner pointed out Couch has a full-time job with as well as other directorships.
These facts, it believes, would hamper his ability to implement the strategy put forward by First Investment. FI wants to kick out the founders, offload the firm’s assets and operations and implement a new business strategy via an acquisition or reverse takeover.
Share swap values Argo stock at 11.6p
In a separate announcement, Argo revealed it has struck a share swap deal with a headline value of £5.1mln with a company called HIVE Blockchain.
HIVE is a business-to-business mining service provider aimed at large-scale enterprise and institutional customers. The pair plan to pool capacity.
As part of the deal Argo will receive 16.3mln HIVE shares, giving it 5% of its partner, while Argo will hand over 44.1mln shares, or 15% of its equity base in exchange. The transaction values Argo stock at 11.6p, or a 231% premium to Friday’s closing price.
The shares rose 43% to 4.99p.
One of the world’s largest crypto miners
HIVE is one of the world’s leading crypto-mining companies, with state-of-the-art mining facilities in Iceland, Sweden and Norway.
The company is listed on the TSX Venture Exchange in Toronto with a market value of C$179mln at Friday’s closing price. It generated US$35.2mln in mining income last year.
Argo chairman Jonathan Bixby said: “This deal makes strategic sense and demonstrates the intrinsic value of our business, our vision and existing investment.
“The alliance is transformational for Argo and will deliver further long-term and sustainable fiat-based revenue streams for the company.”
—adds share price—