Rumble eyes Tether-backed stock takeover of Northern Data

Rumble has expressed an interest in pursuing an all-stock exchange offer to acquire all outstanding shares of Northern Data, a provider of AI and high-performance computing (HPC) solutions.

Under the proposal, shareholders of Northern Data would receive 2.319 newly issued Class A shares of Rumble common stock for each share they tender. The proposed transaction implies that Northern Data shareholders would hold a 33.3% total pro forma ownership in Rumble, assuming all shares are tendered. The final exchange ratio remains subject to potential adjustments, including the possible sale of Northern Data's Peak Mining unit.

Northern Data has stated it is open to further discussions with Rumble regarding the potential offer. Any final terms of the deal, if agreed, would be subject to additional negotiation and customary corporate and regulatory approvals.

Tether's support

Tether, the majority shareholder in Northern Data, has indicated its willingness to support the transaction. In connection with the potential offer, Tether would, subject to completion of definitive documentation, become the single largest holder of Rumble's Class A common stock if the transaction completes.

Tether also highlighted that its investment decision aligns with a strategic ambition to challenge established technology players in the video and cloud sectors. Following the transaction, Tether is expected to become an important customer for Rumble, providing a multi-year commitment to purchase GPUs from the combined business.

Transaction details

The proposed transaction is predicated on the disposal of Northern Data's Peak Mining unit before completing an offer, with the net proceeds allocated to reduce an existing loan provided by Tether to Northern Data. The remaining loan would be retained by Northern Data under modified conditions, with no obligation or liability to Rumble or its pre-transaction subsidiaries.

Upon acquisition, Rumble plans to integrate two of Northern Data's principal assets, its Ardent data centre business and its Taiga GPU-as-a-service unit, into its current operations. Northern Data's infrastructure includes approximately 20,480 Nvidia H100 GPUs and 2,048 H200 GPUs across five owned data centre sites with nearly 850 MW of potential energised capacity.

If the offer proceeds, Chris Pavlovski, Chairman and Chief Executive Officer of Rumble, would maintain majority voting power, having pledged to support the transaction and vote all of his Rumble shares in its favour. 

Conditions and due diligence

Rumble has made clear that no final decision has been made to formally launch the potential offer. Any formal offer would be contingent on a range of conditions, including satisfactory completion of due diligence, approval by Rumble's Board of Directors, and agreement of definitive transaction documentation with Northern Data and Tether. 

Any offer, if launched, would be made subject to customary closing conditions, including regulatory approvals in the Federal Republic of Germany and the United States. Rumble does not currently own any shares in Northern Data nor has it secured any binding commitment to acquire shares outside of the potential offer.

The companies have emphasised that the announcement does not constitute a public tender offer or any obligation to proceed, and that shareholders should await official documents and prospectuses should an offer be formally made.