Rumble is moving forward with an all-stock offer to acquire German data center operator Northern Data at a valuation below Northern Data’s market capitalization of approximately $894 million, according to Bloomberg, which claimed the deal would be announced within the next few days.
The companies share major financial support from Tether Holdings, and the acquisition is expected to support Rumble’s efforts to expand from video hosting into cloud infrastructure.
Under the proposal being discussed, Northern Data shareholders would receive fewer Rumble shares than previously proposed, changing the exchange ratio from 2.319 Rumble shares to approximately 2 Rumble shares for each Northern Data share.
Previous plans had expected the combined company to be worth about $4.5 billion, with Northern Data investors owning one-third of the new company. The combined valuation is now close to $2.9 billion due to the drop in both stock prices.
Staking requirements adjusted to include loan forgiveness
as part of the contract structureTether will forego a significant portion of the €575 million loan it issued to Northern Data.
Confidence in Northern Data has declined following reports that the European Public Prosecutor’s Office has launched a criminal investigation into the company. Authorities are investigating whether Northern Data bought large quantities of GPUs for a facility in northern Sweden while claiming tax incentives for artificial intelligence computing.
Investigators are investigating whether these GPUs were actually used for cryptocurrency mining. The investigation caused the company’s stock price to fall and increased the urgency of resolving its financial situation.
Last week, Northern Data sold its mining division, Peak Mining, for up to $200 million. The buyer has not been disclosed, but a person familiar with the matter said the buyer is also connected to Tether.
The sale will eliminate a division that had attracted regulatory attention and allow Northern Data to focus on its cloud and high-performance computing businesses ahead of an expected merger.
Tether’s earning power provides leverage across sectors
At the same time, Tether is reporting record financial performance. “This year we will be even closer to $15 billion in profits, which is very rare,” Tether CEO Paolo Ardoino said in a speech at the Plan B Forum in Lugano.
USDT, a stablecoin issued by Tether, has a circulating value of approximately $183 billion, accounting for approximately 60% of the stablecoin market.
Despite these benefits, outside companies have expressed interest in investing. There are talks to raise up to $20 billion in exchange for a roughly 3% stake, giving Tether a value of about $500 billion.
Paolo said many companies are approaching the company. “We’re hearing from a huge number of companies who want to invest in us. We have to draw the line at the valuation, which we think is very cheap.”
Tether is preparing to re-enter the US late next year through a new stablecoin project called USAT, which is reportedly in line with pro-crypto policies under President Donald Trump.
Tether currently owns an 11.5% stake in Italian soccer club Juventus. Paolo and Tether chairman Giancarlo Debasini have supported the club since they were children.
Tether has named two people, including a deputy chief investment officer and a local orthodontist, to join Juventus’ board of directors at the next shareholders’ meeting.
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