Rumble Offers $1.2 Billion to Buy Northern Data. What a Deal Means for Tether.

Tether supports an acquisition of Northern Data Group by video-sharing platform Rumble. (Aivaras Sakurovas/Dreamstime.com)

Shares of Rumble rose double-digits on Monday after the video-sharing platform announced an all-stock bid for Northern Data Group , a German data-infrastructure company.

The transaction is valued at roughly $1.17 billion. Under the terms of the offer, each Northern Data share would be exchanged for 2.319 newly issued shares of Rumble. The potential deal would result in around 33.3% total pro forma ownership in Rumble for Northern Data shareholders, Rumble said.

In a press release, Northern Data confirmed the potential exchange offer to its shareholders. The board is reviewing the offer and is “willing to entertain further discussions with Rumble,” Northern Data said.

Tether , the issuer of the stablecoin of the same name, has voiced its support for the deal. The company is currently Northern Data’s biggest shareholder, and completion of the offer would make it the single largest holder of Rumble common stock. Rumble CEO Chris Pavlovski, who currently holds more than 80% of the company’s voting power on a diluted-share basis, will also own the majority of the voting power after the combination, Rumble said.

“Given the ongoing discussions amongst all parties involved, the terms of the Potential Offer, if announced, including the offer price, may differ substantially,” Rumble said in a release.

A potential offer assumes Northern Data’s crypto-mining unit, Peak Mining, will be sold prior to completion of a deal, with proceeds used to reduce the debt owed to Tether. The stablecoin issuer would also become an “important customer” through a multiyear commitment to purchase graphics processing units, Rumble added.

The streaming platform, which characterizes itself as a champion of “free speech,” attracted the support of conservative venture capitalists after its founding in 2013. In 2021, Rumble received an investment from Narya Capital, a firm co-founded by Vice President JD Vance.

Rumble went public in 2022 with an initial enterprise value of $2.1 billion. Shares soared more than 100% in December after Tether pledged to invest $775 million in the company.

The investment, which closed in February, “was predicated on the mutual desire to challenge big tech in all areas—with a deep focus on video and cloud,” Rumble said on Monday.

Shares climbed 17% to $9.21. The benchmark S&P 500 was flat, while the Nasdaq Composite was down slightly.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com