Core Scientific shareholders push back on CoreWeave's $9B takeover offer: report

CoreWeave's $9 billion all-stock acquisition of data center operator Core Scientific is facing significant shareholder resistance, with major investors reportedly considering voting against the deal unless terms are updated. The pushback stems from concerns that the offer undervalues Core Scientific and exposes its shareholders to substantial downside risk, particularly after CoreWeave's stock dropped over 30% since the July 7 announcement, reducing the implied deal value for Core Scientific holders from approximately $20.25 to just over $13 per share. Key investors are reportedly pressing for a collar agreement to stabilize the value received, citing CoreWeave's volatile performance and a pending post-IPO lockup expiry.

Analysis

CoreWeave's (CRWV) proposed $9 billion all-stock acquisition of Core Scientific (CORZ) is facing significant jeopardy due to shareholder resistance, creating material uncertainty around the deal's completion. The core issue, as highlighted by a group of hedge funds, is the offer's structure, which exposes CORZ shareholders to the full downside of CRWV's stock volatility without a protective collar. This risk has been realized, as a greater than 30% decline in CoreWeave's share price since the July 7 announcement has eroded the implied value of the offer from approximately $20.25 to just over $13 per share. This situation is amplified by the strategic importance of Core Scientific, which provides nearly 40% of CoreWeave's computing power, giving dissenting shareholders considerable leverage. The impending expiration of CoreWeave's post-IPO lockup on September 24 introduces another layer of potential downward pressure on its stock, further validating shareholder concerns. With Core Scientific shares trading at $13.50, slightly above the current implied deal value, the market may be pricing in the possibility of a revised, more favorable offer rather than accepting the current terms.

Key Decisions for Investors

• Investors in Core Scientific (CORZ) should recognize the heightened event-driven risk; the vocal shareholder opposition and strategic necessity of CORZ's assets for CoreWeave create a plausible scenario for a sweetened bid or the inclusion of a protective collar.
• For CoreWeave (CRWV) investors, the deal's uncertainty combined with the approaching post-IPO lockup expiry on September 24 presents a notable near-term headwind, and a failure to acquire Core Scientific would force the company to address its critical infrastructure needs through other means, potentially impacting its long-term cost structure.
• The negative spread, where Core Scientific's stock trades above the current implied deal value, suggests merger arbitrageurs are anticipating a revised offer, but this remains a high-risk position given the binary outcome of the shareholder vote this fall.