Rumble Advances with Revised All-Share Offer to Acquire Northern Data at a Lower Valuation
Rumble is moving forward with an all-share offer to acquire German data center operator Northern Data, marking a significant step in its expansion into cloud infrastructure. Notably, the acquisition’s valuation will be below Northern Data’s current market capitalization of approximately $894 million.
**Revised Offer Reflects Market Realities**
The updated offer sees a reduction in the exchange ratio for Northern Data shareholders. Initially, shareholders were to receive 2.319 Rumble shares per each Northern Data share. The revised proposal lowers this to 2 Rumble shares per Northern Data share.
This adjustment reflects a significant drop in the combined valuation of the two companies, now estimated at $2.9 billion — down from the originally projected $4.5 billion. Declines in the stock prices of both companies have directly influenced the final terms of the deal.
**Tether Holdings’ Key Role in the Transaction**
Tether Holdings, a major financial backer of both Rumble and Northern Data, is playing a crucial role in facilitating the acquisition. As part of the agreement, Tether will forgo a substantial portion of a €575 million loan it extended to Northern Data, easing the latter’s financial pressures ahead of the merger.
**Northern Data Faces Challenges and Restructures Operations**
Northern Data has encountered several challenges recently, including a criminal investigation by European authorities. The investigation centers on potential misuse of tax incentives originally intended for AI computing. Specifically, prosecutors are examining whether Northern Data used GPUs, purchased for artificial intelligence tasks, for cryptocurrency mining instead.
This scrutiny has weighed heavily on Northern Data’s share price, prompting the company to accelerate efforts to divest non-core assets. Recently, Northern Data sold its mining division, Peak Mining, for up to $200 million to a buyer connected to Tether.
The divestment reflects Northern Data’s strategic shift toward focusing on cloud and high-performance computing operations, aiming to build a more stable foundation ahead of the merger with Rumble.
**Tether’s Strong Financial Position and Expanding Ambitions**
Despite Northern Data’s struggles, Tether’s financial health remains robust. As issuer of the USDT stablecoin, Tether is experiencing record profits. CEO Paolo Ardoino recently announced expectations of approaching $15 billion in profit this year.
Tether’s USDT stablecoin boasts $183 billion in circulation, representing roughly 60% of the stablecoin market, underscoring the company’s dominance in the sector.
Beyond its core crypto activities, Tether is exploring expansive new ventures, including plans for a potential $20 billion investment that would value the company at $500 billion. It has also diversified by acquiring an 11.5% stake in Italian football club Juventus, with Tether nominating two members to the club’s board— moves that highlight its growing influence beyond the cryptocurrency industry.
**Looking Ahead**
Rumble’s planned acquisition of Northern Data, supported strongly by Tether, is a strategic move that could reshape both companies’ futures. It consolidates Rumble’s position in cloud infrastructure while providing Northern Data a pathway to stabilize and refocus its business operations.
As the deal approaches official announcement, investors and industry observers alike will be watching closely to see how this integration plays out in the evolving landscape of cloud computing and digital finance.
https://coincentral.com/rumble-set-to-acquire-northern-data-in-cloud-power-play-with-tether/
