The US video service Rumble is considering a takeover bid for the German AI cloud company Northern Data worth 1.17 billion US dollars (around one billion euros). This was announced by both companies on Monday. Northern Data AG, based in Frankfurt am Main, has been informed by Rumble “that Rumble is interested in a potential exchange offer for 100% of the outstanding shares of Northern Data AG”, the German company, which develops global infrastructure solutions in the field of high-performance computing (HPC), said in a press release.
According to the press release, Rumble, which among other things hosts the social media platform Truth Social of current US President Donald Trump, wants to offer 2,319 of its own shares for each Northern Data share. According to calculations by the news agency Reuters, the proposed offer values Northern Data at around USD 18.30 per share. This means that the provisional purchase price is significantly below Northern Data’s market value. The share price plummeted by more than 20 percent on the Frankfurt Stock Exchange on Monday.
The Supervisory Board and Management Board of Northern Data said they were open to further talks; however, the company assumes that a final takeover bid will lead to a higher valuation. As Handelsblatt writes, Tether, Northern Data’s majority shareholder and operator of the stablecoin of the same name, has already approved the transaction. According to Rumble, Tether holds 54 percent of Northern Data. According to Reuters, Tether invested 775 million US dollars in Rumble in December and currently holds 48 percent of the shares. The exchange offer as part of the Northern Data takeover would probably give Tether a majority stake in Rumble; however, Rumble CEO Chris Pavlovski would continue to hold the majority of voting rights.
Control over cloud business and data center division
The acquisition would give Rumble, whose investors include tech billionaire Peter Thiel and Narya, an investment firm co-founded by JD Vance, the current US Vice President, control of Northern Data’s cloud business Taiga and data center division Ardent. According to Reuters, Northern Data has a considerable inventory of Nvidia graphics processing units (GPUs), including around 20,480 H100 chips and over 2,000 H200 chips.
However, Northern Data is to divest its crypto mining business before a takeover. “Rumble’s Potential Exchange Offer assumes that Northern Data’s Peak Mining business will be divested before completion of the Potential Exchange Offer,” according to the Northern Data announcement. According to Handelsblatt, a non-binding agreement has already been reached. Accordingly, Northern Data’s crypto mining division is to be sold to Bitcoin miner Elektron Energy for 175 to 235 million US dollars. The proceeds are to be used to repay part of an existing loan from Tether to Northern Data. Tether lent Northern Data 575 million euros almost two years ago to expand its own business.
The cryptocurrency platform Tether operates the world’s largest stablecoin. At the beginning of the year, the company relocated its headquarters to El Salvador. Previously, the company was registered in the British Virgin Islands.
(akn)
