Argo Blockchain Reveals Strategic Partnership With HIVE Blockchain (ALLISS)

LONDON (Alliance News) - Argo Blockchain PLC on Monday unveiled a new strategic partnership with ...

Alliance News 13 May, 2019 | 9:49AM
Email Form

LONDON (Alliance News) - Argo Blockchain PLC on Monday unveiled a new strategic partnership with HIVE Blockchain Technologies Ltd and expressed concerns over the shareholder proposal to appoint Jeff Couch on the company's board.

The foundation of the partnership is a share swap arrangement whereby Argo will receive 16.3 million HIVE shares - 5% of HIVE's share capital - in exchange for 44.1 million Argo shares representing 15% of Argo's share capital. The deal values Argo's shares at 11.6 pence each and will involve no cash exchange.

Shares in Argo were up 39% at 4.88 pence on Monday morning.

Under the strategic partnership, for which conditional heads of terms have been signed, Argo and Hive intend to create "the world's largest purpose-built business-to-business [bitcoin] mining service provider" which will target "large-scale enterprise and institutional customers".

Argo is a data management firm and provides a platform to mine cryptocurrencies like bitcoin. HIVE, meanwhile, is a crypto-mining company listed on Canada's TSX Venture Exchange with facilities in Iceland, Sweden, and Norway.

The partnership is the culmination of three months of discussions and will give cryptocurrency miners access to Argo's 10.5 megawatt and part of HIVE's 45 megawatt capacity.

HIVE's market value is around CAD179 million, or GBP102.4 million, based on its Friday closing price. HIVE's reported mining income in 2018 was USD35.2 million.

Argo Executive Chair 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."

Also on Monday, Argo commented on First Investment Hold Ltd's proposal to appoint Jeff Couch as director. First Investment owns a 14% Argo stake and requisitioned a meeting for Thursday this week in order to appoint a new director and remove two existing directors, including Chair Bixby.

First Investment disclosed its plan to appoint Couch "on the last permissible date", Argo said. Argo also pointed out that Couch is employed full-time at the Bank of Montreal in London, as well as holding directorships at a number of other places.

Argo said: "Couch will face challenging time constraints to implement the steps advocated by First Investments, including terminating or disposing of all of the company's operations and negotiating and implementing a new business strategy, likely through an acquisition and therefore a reverse takeover.

"First Investments further claims that Couch has extensive contacts and experience to source a suitable, cash generative, alternative business proposition. The board does not share this confidence and as far as the board can ascertain Couch's recent experience is almost all in the natural resources sector."

Furthermore, Argo disputed First Investments' claim that Couch has been appointed purely as a result of his financial expertise, as Couch was a director at African Petroleum Corp Ltd when Frank Timis - who controls First Investments - was director and founder.

By Anna Farley; annafarley@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

Email Form
Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Argo Blockchain PLC 5.80 -
About Author Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.